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Mitsubishi UFJ Financial Group, Inc.
November 18, 2021
FY2021H1 IR presentation
2
DisclaimerThis document contains forward-looking statements in regard to forecasts, targets and plans of Mitsubishi UFJ Financial Group, Inc. (“MUFG”) and its group companies (collectively, “the group”). These forward-looking statements are based on information currently available to the group and are stated here on the basis of the outlook at the time that this document was produced. In addition, in producing these statements certain assumptions (premises) have been utilized. These statements and assumptions (premises) are subjective and may prove to be incorrect and may not be realized in the future. Underlying such circumstances are a large number of risks and uncertainties. Please see other disclosure and public filings made or will be made by MUFG and the other companies comprising the group, including the latest kessantanshin, financial reports, Japanese securities reports, Integrated reports and annual reports, for additional information regarding such risks and uncertainties. The group has no obligation or intent to update any forward-looking statements contained in this document. In addition, information on companies and other entities outside the group that is recorded in this document has been obtained from publicly available information and other sources. The accuracy and appropriateness of that information has not been verified by the group and cannot be guaranteed. The financial information used in this document was prepared in accordance with Japanese GAAP (which includes Japanese managerial accounting standards), unless otherwise stated. Japanese GAAP and U.S. GAAP, differ in certain important respects. You should consult your own professional advisers for a more complete understanding of the differences between U.S. GAAP and Japanese GAAP and the generally accepted accounting principles of other jurisdictions and how those differences might affect the financial information contained in this document. This document is being released by MUFG outside of the United States and is not targeted at persons located in the United States.
Definitions of figures used in this document
Consolidated: Mitsubishi UFJ Financial Group (consolidated)Non-consolidated: Simple sum of MUFG Bank (non-consolidated) and Mitsubishi UFJ Trust & Banking Corporation (non-consolidated)the Bank (consolidated): MUFG Bank (consolidated)MUFG: Mitsubishi UFJ Financial Groupthe Bank (BK): MUFG Bankthe Trust Bank (TB): Mitsubishi UFJ Trust & Banking Corporationthe Securities HD (SCHD): Mitsubishi UFJ Securities HoldingsMUMSS: Mitsubishi UFJ Morgan Stanley SecuritiesMSMS: Morgan Stanley MUFG SecuritiesNICOS: Mitsubishi UFJ NICOSMUAH: MUFG Americas Holdings CorporationKS: Bank of Ayudhya (Krungsri, KS)Bank Danamon (BDI): Bank Danamon Indonesia
FSI: First Sentier Investors MUB: MUFG Union Bank DS: Digital Service R&C: Retail & Commercial BankingJCIB: Japanese Corporate & Investment BankingGCIB: Global Corporate & Investment BankingGCB: Global Commercial BankingAM/IS: Asset Management & Investor Services
3
Key message
∎FY21H1 result
∎FY21 target
∎Progressive dividend
∎Share buyback :Repurchase of own shares up to ¥150.0bn was resolved
FY21H1 result and FY21 target
Capital policy:FY21 DPS forecast was revised upward by ¥1 to ¥28 from previous forecast, up by ¥3 compared to FY20
:Net profits*1 was ¥781.4bn, 91.9% progress toward FY21 initial target
:Revised FY21 target upward to ¥1,050.0bn (up by ¥200.0bn from initial target)
∎Financial targetX
*1 Profits attributable to owners of parent *2 Greenhouse gas (GHG) emissions financed by loans and investments
Progress of the medium-term business plan
∎Sale of MUB :Decided to sell MUB with an eye to optimally allocating management resources(Closing of the transaction expected in 2022)
:Due to the decrease of credit costs, etc., ROE was 10.91% (+5.08% YoY)Key Strategies (“Strategy for growth” and “Structural reforms”) are overall steadily progressing
∎Financed emissions*2
Approach to carbon neutrality:Set 2030 interim targets for “Electricity” and “Oil & Gas” in spring 2022
∎Own emissions :Reduced significantly by completing the shift of domestic electricity procurement directly by the Bank, the Trust bank, and the Securities HD to 100% renewable sources
4
Contents
FY21H1 financial results 5
Progress of the medium-term business plan (MTBP) 23
Approach to carbon neutrality 42
Capital policy 47
Appendix 54
5
FY21H1 financial results
FY21H1 financial results Progress of the medium-term business plan
Approach to carbon neutrality Capital policy
6
FY21H1 financial results and FY21 targets
【Reasons of upward revision】 Net operating profits:+¥50.0bn
Revised upward to ¥1,150.0bn mainly due to strong performance in customer segments in H1 Profits attributable to owners of parent :+¥200.0bn
Revised upward to ¥1,050.0bn considering progress in H1 as well as a possibility of impairment loss of fixed assets following the implementation of new methodology on a recognition of impairment loss, consistent with the enhancement of business management framework under consideration towards the end of this fiscal year
-Revised FY21 target for profits attributable to owners of parent upward to ¥1,050.0bn,in light of progress in the first half
FY20H1 FY21H1 FY21 full year
MUFG consolidated (¥bn) Results Results YoY Revised targets
Changes frominitial targets
1 Gross profits *1(before credit costs for trust accounts) 2,057.8 1,980.8 (76.9) - -
2 G&A expenses *1 1,317.3 1,343.2 25.9 - -
3 Net operating profits 740.4 637.5 (102.8) 1,150.0 +50.0
4 Total credit costs (258.4) 17.9 276.3 (150.0) +200.0
5 Ordinary profits 590.2 986.0 395.7 1,550.0 +400.0
6 Profits attributable toowners of parent 400.8 781.4 380.6 1,050.0 +200.0
*1 From FY21, expenses related to credit cards, which were previously recorded as G&A expenses, are recorded as fees and commissions expenses.The amount of retroactive adjustment in FY20H1 was ¥35.1bn
FY21H1 financial results Progress of the medium-term business plan
Approach to carbon neutrality Capital policy
7
88.3(13%)
108.4(16%)92.3
(14%)109.6(17%)
162.6(25%)
57.7(9%)
39.7(6%)
Net operating profits results by business group
Net operating profits by business group*1 Changes by business groupConsolidated Consolidated
*1 All figures are in actual exchange rate and managerial accounting basis*2 Include net operating profits from “Others” segment (FY20H1: (¥67.1)bn, FY21H1: (¥24.6)bn)*3 Global Markets business group manages profits including accounts such as net gains(losses) on equity securities which are not included in net operating profits.
The YoY change for those accounts was +¥72.5bn, including improvement in profits from sales of ETF +¥46.2bn and hedge profits of specified money trust +¥26.3bn
FY21H1 ¥634.1bn*2
GlobalMarkets*3
(187.5)
Others+42.5
R&C+35.2
JCIB+11.7
GCB(42.3)
GCIB+24.2
AM/IS+22.4
GCB
733.1
634.1
(¥bn)(¥bn)
Total of customersegments +45.9
GlobalMarkets
AM/IS
GCIB
DS
R&C
JCIB
DS(5.3)
+¥72.5bn in the accountsnot included in net operating
profits
FY20H1 FY21H1
FY21H1 financial results Progress of the medium-term business plan
Approach to carbon neutrality Capital policy
8
19.8 24.2
(2.1)
29.3 88.1
125.3
(33.3)
71.8
34.7
40.6
(7.4)
72.1
221.6
140.6114.5
227.0
FY20H1 FY21H1
R&C
(¥bn)
Net income results by business group
FY21H1 781.4*2
400.8*2
CustomerSegments
99.8
*1 On a managerial accounting basis (preliminary results). Local currency basis *2 Include other net income (FY20H1: (¥35.1)bn, FY21H1: ¥50.3bn)*3 Includes gains/losses on change in equity (FY20H1: (¥16.5)bn, FY21H1: ¥36.8bn)
CustomerSegments
363.4
*3
FY20H1
(¥bn)
R&C+31.5
JCIB+37.2
GCIB+79.6
GCB+105.1
AM/IS+5.9
400.8
781.4
Global Markets(81.0)
FY21H1
CustomerSegments+263.6
DS+4.4
MorganStanley+112.5
Others+85.5
Net income by business group, etc.*1 Changes by business group, etc.
Morgan Stanley
Global Markets
GCIB
AM/IS
GCB
JCIB
DS
Consolidated Consolidated
FY21H1 financial results Progress of the medium-term business plan
Approach to carbon neutrality Capital policy
9
Business group
Net operating profits (¥bn)*1 Expense ratio*1 ROE*2 RWA (¥tn)*3
FY21 H1 YoY FY21
H1 YoY FY21 H1 YoY End
Sep 21Changesfrom end Mar 21
Digital Service 88.4 (5.8) 76% 1ppt 5% 1ppt 8.9 (0.1)
Retail & CommercialBanking 39.7 35.8 86% (12ppt) 3% 3.5ppt 16.7 (0.5)
Japanese Corporate& Investment Banking 105.5 6.5 59% (2ppt) 8% 2ppt 33.4 (0.9)
Global Corporate& Investment Banking 80.7 14.5 62% (4ppt) 7.5% 6ppt 22.2 (0.3)
Global CommercialBanking 105.3 (40.5) 71% 7ppt 7.5% 11ppt 17.0 (0.2)
Asset Management& Investor Services 56.0 20.8 67% (8ppt) 33.5% 4.5ppt 2.1 0.2
Global Markets 199.2 (88.3) 36% 8ppt 8.5% (2ppt) 19.0 0.6
DS
JCIB
GCB
AM/IS
GCIB
GlobalMarkets
R&C
*1 Local currency basis *2 Calculated based on Risk Assets (DS, R&C, JCIB, GCIB and GCB) or economic capital (AM/IS and Global Markets).(Managerial accounting basis. Net profits basis. Calculated excluding non-JPY mid- to long-term funding costs)
*3 The finalized Basel III reforms basis. Managerial accounting basis. (Estimation as of September). Actual figures as of end Mar 21 are restated
Results by business group (1)
Consolidated
FY21H1 financial results Progress of the medium-term business plan
Approach to carbon neutrality Capital policy
10
(¥bn) FY20H1 FY21H1 YoY
Gross profits 366.0 364.6 (1.4)Loan and deposit interestincome 76.1 73.5 (2.6)
Domestic and foreign settlement / forex 21.9 20.4 (1.4)
Card settlement 107.6 107.1 (0.5)Consumer finance 143.0 138.2 (4.8)
Expenses 271.8 276.2 4.4Expense ratio 74% 76% 1ppt
Net operating profits 94.2 88.4 (5.8)Credit costs*2 (39.7) (33.9) 5.8
Net profits 19.8 24.2 4.4
RWA*3 (¥tn) 9.0 8.9 (0.1)ROE 4% 5% 1ppt
Ave. housing loan balance (¥tn) 11.3 11.2 (0.1)
Ave. deposit balance (¥tn) 53.4 56.2 2.8Balance of consumer loans*4 (¥tn) 1.4 1.4 (0.0)Volume of card shopping*5
(¥tn) 2.4 2.5 0.1
Digital Service*1
(¥bn) FY20H1 FY21H1 YoY
Gross profits 251.3 287.5 36.2Loan and deposit interestincome 81.8 79.8 (2.0)
Domestic and foreign settlement / forex 44.1 47.3 3.2
Derivatives, solutions 14.5 23.5 9.0Real estate, corporate agency and inheritance 19.0 25.2 6.2
Investment product sales 81.0 98.2 17.3
Expenses 247.5 247.8 0.3
Expense ratio 98% 86% (12ppt)
Net operating profits 3.9 39.7 35.8
Credit costs (14.3) 2.4 16.7
Net profits (2.1) 29.3 31.5
RWA*3 (¥tn) 17.3 16.7 (0.6)
ROE (0%) 3% 3.5ppt
Ave. loan balance*6 (¥tn) 20.4 20.2 (0.2)
Lending spread*7 0.53% 0.53% 0.00ppt
Ave. deposit balance (¥tn) 71.9 79.8 7.9
Retail & Commercial Banking*1
Results by business group (2)
*1 Managerial accounting basis. Local currency basis. ROE is calculated based on net profits and excludes non-JPY mid- to long-term funding costs*2 Including provision for losses from interest repayments *3 The finalized Basel III reforms basis. Managerial accounting basis. (Estimation as of September)*4 Total balance of personal card loans of the Bank, the Trust Bank and ACOM (excl. guarantee) *5 For NICOS cardmembers*6 Excluding consumer loans *7 Excluding non-JPY mid- to long-term funding costs
FY21H1 financial results Progress of the medium-term business plan
Approach to carbon neutrality Capital policy
11
Results by business group (3)
(¥bn) FY20H1 FY21H1 YoY
Gross profits 196.6 212.9 16.2Loan and deposit interest income 103.9 108.7 4.9
Commission 80.9 91.8 10.9
Forex, derivatives 9.0 6.8 (2.2)
DCM・ECM 16.2 13.0 (3.3)
Expenses 130.4 132.1 1.8
Expense ratio 66% 62% (4ppt)
Net operating profits 66.3 80.7 14.5
Credit costs (74.1) 16.2 90.2
Net profits (7.4) 72.1 79.6
RWA*4 (¥tn) 22.6 22.2 (0.4)
ROE 1.5% 7.5% 6ppt
Ave. loan balance (¥tn) 22.5 19.1 (3.4)
Lending spread*5 1.12% 1.20% 0.08ppt
Ave. deposit balance (¥tn) 13.9 14.3 0.4
Global Corporate & Investment Banking*1
*1 Managerial accounting basis. Local currency basis. ROE is calculated based on net profits and excludes non-JPY mid- to long-term funding costs*2 Domestic business only *3 Including real estate securitization etc. *4 The finalized Basel III reforms basis. Managerial accounting basis.
(Estimation as of September) *5 Excluding non-JPY mid- to long-term funding costs *6 Sum of domestic and overseas loans and deposits
(¥bn) FY20H1 FY21H1 YoYGross profits 251.3 257.3 6.0
Loan and deposit interest income 97.2 105.6 8.5
Domestic and foreign settlement / forex*2 37.1 39.5 2.4
Derivatives, solutions*2 36.8 19.9 (16.9)Real estate, corporate agency 20.6 24.4 3.8
M&A・DCM・ECM*3 20.5 26.0 5.5Expenses 152.3 151.8 (0.5)
Expense ratio 61% 59% (2ppt)Net operating profits 98.9 105.5 6.5
Credit costs (9.7) 26.9 36.6Net profits 88.1 125.3 37.2
RWA*4 (¥tn) 34.8 33.4 (1.4)ROE 6% 8% 2ppt
Ave. loan balance (¥tn) 41.2 38.5 (2.7)Lending spread*5 0.47% 0.51% 0.04pptAve. non-JPYloan balance*6 (¥tn) 15.3 12.9 (2.4)
Non-JPYlending spread*5*6 0.66% 0.72% 0.06ppt
Ave. deposit balance (¥tn) 36.9 39.3 2.4Ave. non-JPYdeposit balance*6 (¥tn) 13.7 15.7 1.9
Japanese Corporate & Investment Banking*1
FY21H1 financial results Progress of the medium-term business plan
Approach to carbon neutrality Capital policy
12
Results by business group (4)
(¥bn) FY20H1 FY21H1 YoY
Gross profits 400.7 361.1 (39.5)MUAH*2 153.9 142.6 (11.3)KS*3 176.1 158.9 (17.1)BDI 66.9 59.5 (7.5)
Expenses 254.8 255.8 1.0 (Expense ratio) 64% 71% 7ppt
MUAH*2 124.5 125.9 1.4 (Expense ratio) 81% 88% 7pptKS*3 80.2 80.8 0.6 (Expense ratio) 46% 51% 5pptBDI 30.8 30.3 (0.5)(Expense ratio) 46% 51% 5ppt
Net operating profits 145.8 105.3 (40.5)MUAH*2 29.5 16.7 (12.8)KS*3 95.9 78.2 (17.7)BDI 36.1 29.2 (6.9)Credit costs (145.1) (30.5) 114.6 MUAH*2 (71.6) 31.1 102.7 KS*3 (47.1) (40.3) 6.9 BDI (26.0) (18.9) 7.1
(¥bn) FY20H1 FY21H1 YoY
Net profits (33.3) 71.8 105.1 MUAH*2 (57.1) 30.1 87.2 KS*3 30.9 48.3 17.5 BDI 5.7 6.8 1.0
RWA*4 (¥tn) 17.6 17.0 (0.6)ROE (3.5%) 7.5% 11ppt
MUAH*2 (12.5%) 7% 20pptKS*3 8.5% 13% 5pptBDI 7% 8.5% 1.5ppt
(¥tn)
MUAH*2
Ave. loan balance 7.3 6.3 (1.1)Ave. deposit balance 8.5 8.8 0.2NIM*5 2.23% 2.13% (0.10ppt)
KS*3
Ave. loan balance 6.2 6.1 (0.1)Ave. deposit balance 5.5 6.3 0.8NIM*6 3.74% 3.08% (0.66ppt)
BDIAve. loan balance 1.0 0.9 (0.1)Ave. deposit balance 0.8 0.9 0.0NIM*7 8.08% 7.55% (0.53ppt)
Global Commercial Banking*1
*1 Managerial accounting basis. Local currency basis. Per MUAH and KS, gross profits, expenses and net operating profits include figures which belong to GCB only and not include figures which belong to other business groups. BDI entity basis. ROE is calculated based on net profits
*2 Excluding figures belonging to TB/SCHD subsidiaries, JCIB, GCIB and Global Markets*3 After GAAP adjustment. Excluding figures which belong to Global Markets *4 The finalized Basel III reforms basis. Managerial accounting basis.
(Estimation as of September) *5 Excluding figures which belong to Global Markets *6 KS entity basis *7 OJK definition
FY21H1 financial results Progress of the medium-term business plan
Approach to carbon neutrality Capital policy
13
Results by business group (5)
(¥bn) FY20H1 FY21H1 YoY
Gross profits 403.2 312.3 (90.9)
Sales & trading 136.9 93.8 (43.2)
FIC & equity 136.1 92.8 (43.3)
Corporates 48.6 44.9 (3.7)Institutionalinvestors 72.9 33.2 (39.7)
Asset management 0.8 0.9 0.1
Treasury 270.1 221.1 (49.0)
Expenses 115.7 113.1 (2.6)
Expense ratio 29% 36% 8ppt
Net operating profits 287.5 199.2 (88.3)
Customer business 47.8 7.7 (40.1)
Treasury 243.6 194.2 (49.3)
Net profits 221.6 140.6 (81.0)
Economic capital (¥tn) 5.2 4.1 (1.1)
ROE 10.5% 8.5% (2ppt)
Global Markets*1
*1 Managerial accounting basis. Local currency basis. ROE is calculated based on net profits
(¥bn) FY20H1 FY21H1 YoY
Gross profits 137.5 167.9 30.4
AM 55.3 75.3 20.0
IS 51.0 58.1 7.2
Pension 31.2 34.4 3.2
Expenses 102.3 111.9 9.6
Expense ratio 74% 67% (8ppt)
Net operating profits 35.2 56.0 20.8
Net profits 34.7 40.6 5.9
Economic capital (¥tn) 0.3 0.3 0.0
ROE 29% 33.5% 4.5ppt
Asset Management & Investor Services*1
FY21H1 financial results Progress of the medium-term business plan
Approach to carbon neutrality Capital policy
14
Progress ratio of FY21 and breakdown by entity
*1 The figures reflect the percentage holding in each subsidiaries and equity method investees*2 The figure includes ¥36.8bn of gains on change in equity *3 Consumer Finance *4 Asset Management *5 Investor Services
FSI、MUFG Investor Services
MorganStanley
Banking(R&C)
Banking(Large corporate)
Card business・CF*3
Securities
AM*4・IS*5
the Bank
MUAH, KS,BDI
(Partner banks)
Overseas
the Bank
NICOS, ACOM
MUMSS, MSMS
the Trust Bank
Japan
MUFGSecurities
Strategic alliance
Business
・・・Unique business portfolio of MUFG
Business Portfolio of MUFG
MUAH75.0
KS56.6
theSecurities
HD(1.4)
NICOS2.4
ACOM15.5
MorganStanley 227.0
MUFG781.4
theTrustBank102.3
Others(28.3)BDI
8.3FSI15.4
*2(¥bn)
theBank308.3
H1
Results781.4
951.4 926.4
989.6
872.6
528.1
777.0
FY15 FY16 FY17 FY18 FY19 FY20 FY21
Target1,050.0
(¥bn)
Progressratio for revised target74.4%
Consolidated Breakdown by entity*1Profits attributable to owners of parent Consolidated
FY21H1 financial results Progress of the medium-term business plan
Approach to carbon neutrality Capital policy
15
77.0 79.3 84.8 86.3
63.0 66.579.7 78.6
40.1 41.746.9 47.2
180.1 187.6
End Mar 19 End Mar 20 End Mar 21 End Sep 21
15.1 14.8 14.9 14.7
43.9 44.6 48.4 46.83.2 3.0 2.5 2.442.8 44.4 39.3 38.42.5 2.5 2.2 2.3
107.7 109.4 107.5 104.7
End Mar 19 End Mar 20 End Mar 21 End Sep 21
Balance sheet summary
Deposits (period end balance)
Loans (period end balance)Balance sheet summary Consolidated Consolidated
Consolidated
*1 Non-consolidated + trust accounts *2 Excluding loans to government and governmental institutions and including foreign currency denominated loans (Excluding impact of FX fluctuation: ¥(1.6)tn from end Mar 2021)
*3 Loans booked in overseas branches, MUAH, KS, BDI, the Bank (China), the Bank (Malaysia) and the Bank (Europe) *4 Non-consolidated
Assets¥360.4tn
Liabilities
Net assets¥18.7tn
¥341.6tnConsumer finance/ OthersOverseas*3
GovernmentDomestic corporate*1*2
Housing loan*1
Overseas andothers
Domesticcorporate etc.*4
Domesticindividual*4
Overseas: (0.9) from end Mar 2021((1.6) excluding impact of FX fluctuation)
(¥tn)
(¥tn)
As of end Sep 2021
Overseas and others: +0.3 from end Mar 2021((0.6) excluding impact of FX fluctuation)
Loans(Banking + Trust accounts)
¥104.7tn
Investment Securities
(Banking accounts)
¥82.3tn
¥212.2tn
Deposits
211.5 212.2
FY21H1 financial results Progress of the medium-term business plan
Approach to carbon neutrality Capital policy
16
15.1 14.8 14.9 14.7
23.2 23.3 23.9 23.2
20.7 21.224.4 23.5
3.2 3.02.5
2.462.3 62.5
65.963.9
End Mar 19 End Mar 20 End Mar 21 End Sep 21
Domestic loans
(¥tn)
Deposit / lending rate*4*5Loan balance (period end balance)*1
Corporate lending spread*2*4*5
Consolidated Non-consolidated
Non-consolidated
*1 Sum of banking and trust accounts *2 Including non-JPY loans*3 Domestic loans to small / medium-sized companies and proprietors (excluding domestic consumer loans)*4 Managerial accounting basis *5 Excluding lending to government etc.
(2.0) from end Mar 2021((2.0) excluding impact of FX fluctuation)
Government
Largecorporate*2
SME*2*3
Housing loan
0.73% 0.73%0.76% 0.74% 0.76%
0.73% 0.72%0.75%
0.74%0.75%
0.00% 0.00%0.00% 0.00% 0.00%
0.0%
0.6%
0.7%
0.8%
0.9%
FY19Q2
FY20Q2
FY21Q2
Lending rate Deposit / lending spread Deposit rate
0.42% 0.42% 0.43%0.45% 0.45%
0.51% 0.50%
0.53% 0.51%0.54%
0.3%
0.4%
0.5%
0.6%
FY19Q2
FY20Q2
FY21Q2
Large corporate SME
FY21H1 financial results Progress of the medium-term business plan
Approach to carbon neutrality Capital policy
17
8.9 9.5 7.3 6.8
7.6 7.46.7 6.1
12.3 11.911.2 11.2
9.4 9.58.3 8.5
4.2 4.8
4.6 4.6
1.0
0.8 0.8
0.10.1
0.0 0.0
42.844.4
39.3 38.4
End Mar 19 End Mar 20 End Mar 21 End Sep 21
(0.9) from end Mar 2021((1.6) excluding impact of FX fluctuation)
Overseas loans
(¥tn)
Net interest margin
Deposit / lending rate*2Loan balance (period end balance) Consolidated
*1 Loans booked at offshore markets etc. *2 Managerial accounting basis *3 Financial results as disclosed in BDI’s financial reports based on Indonesia GAAP. Incorporated impact from netting-off loss on restructuring to interest income.
*4 Financial results as disclosed in KS’s financial reports based on Thai GAAP, and starting from January 1, 2020, Thailand adopted TFRS 9 (which isbroadly similar to the IFRS 9 international accounting standard) *5 Financial results as disclosed in MUAH’s 10-K and 10-Q reports based on U.S. GAAP.
MUAH / KS / BDI
Non-consolidated
Lending spread*2 Non-consolidated
1.39% 1.29% 1.30% 1.23% 1.22%
0.98% 0.98% 1.01% 1.00% 1.02%0.41% 0.32% 0.29% 0.23% 0.20%
0.0%
1.0%
2.0%
3.0%
FY19Q2
FY20Q2
FY21Q2
Lending rate Deposit / lending spread Deposit rate
0.91% 0.92% 0.92% 0.94% 0.94%
0.80%
0.85%
0.90%
0.95%
FY19Q2
FY20Q2
FY21Q2
3.51% 3.34% 3.14% 3.07% 3.05%
2.05% 2.00% 1.98% 1.96% 1.86%
7.0% 7.2% 7.4% 7.3%7.8%
0.0%
2.0%
4.0%
8.0%
10.0%
FY19Q2
FY20Q2
FY21Q2
BDI KS MUAH*3 *4 *5
KS
EMEA
Americas
MUAH
Asia / Oceania
BDIOthers*1
FY21H1 financial results Progress of the medium-term business plan
Approach to carbon neutrality Capital policy
18
0
100
200
200
300
400
End Mar 18
End Sep18
End Mar19
End Sep19
End Mar 20
End Sep20
End Mar21
End Sep21279
125
Collateralizedfunding, etc.
Corp bonds/loans
Mid-long termcurrency swap
Historical mid- to long-term market funding
25
50
75
100
125
125
150
175
200
End Mar18
End Sep 18
End Mar 19
End Sep 19
End Mar 20
End Sep 20
End Mar21
End Sep 21
-Reduced non-JPY funding cost due to the decrease of loan-to-deposit gap
Loans286
Non-JPY liquidity*1
(US$bn) As of end Sep 2021
Deposits(incl. deposits
from central banks)
Mid- to long-term market funding
17
44
64
*1 The Bank consolidated excl. MUAH, KS and BDI. Managerial basis
Historical loan-to-deposit gap(US$bn) Loans Deposits
Loan-to-deposit gap (right axis)
(US$bn) Mid-long term currency swapMid- to long-term market funding
(right axis)
FY21H1 financial results Progress of the medium-term business plan
Approach to carbon neutrality Capital policy
19
Balance Unrealized gains (losses)
End Sep 21Changes from End Mar 21
End Sep 21Changes from End Mar 21
1 Total 7,8561.1 4,669.1 3,877.5 127.5
2 Domestic equity securities 5,367.5 151.2 3,545.5 194.9
3 Domestic bonds 42,034.6 1,482.3 118.0 (4.4)
4Japanese government bonds (JGB)
33,284.1 939.4 78.5 (8.4)
5 Foreign equity securities 108.1 22.0 41.1 20.0
6 Foreign bonds 24,505.6 3,268.9 55.1 (47.8)
7 Others 6,545.1 (255.4) 117.6 (35.1)
Investment securities (1)
(¥bn) (¥tn)
Unrealized gains / losses on AFS securities*1AFS securities*1 with fair value Consolidated Consolidated
*1 Available for sale securities
2.76 2.69
2.13
2.74
3.35 3.54
0.35 0.37
0.17
0.18
0.12 0.11
0.21 0.59
0.57
0.62
0.27 0.21
3.33
3.67
2.88
3.55 3.74
3.87
Foreign equity securities + Foreign bonds +OthersDomestic bondsDomesstic equity securities
EndMar 19
EndSep 19
EndSep 20
EndSep 21
EndMar 20
EndMar 21
FY21H1 financial results Progress of the medium-term business plan
Approach to carbon neutrality Capital policy
20
2.0 2.3 2.5 2.5 1.9 1.8 2.5 2.4 2.9 4.3 5.5 5.8
5.3 5.8 5.4 7.2 4.4 5.1
9.4 8.5 10.8 5.8
6.5 8.3
19.3 19.1
21.6 19.8
18.5
21.2
5.76.0
5.55.1 5.2 5.2
0
10
20
30
EndMar 19
EndSep 19
EndMar 20
EndSep 20
EndMar 21
End Sep 21
Over 10 years 5 years to 10 years1 year to 5 years Within 1 yearAverage duration (year)
11.6 12.410.3
19.022.8 23.5
7.1 3.7 7.5
7.7 4.0
4.9
2.1
1.3 1.1
2.1 3.8 3.1
1.8
2.62.6
3.02.5 2.7
22.720.2
21.7
32.033.4
34.3
2.53.3 3.5
2.8 2.9 2.7
0
10
20
30
40
EndMar 19
EndSep 19
EndMar 20
EndSep 20
EndMar 21
EndSep 21
Over 10 years 5 years to 10 years1 year to 5 years Within 1yearAverage duration (year)
Investment securities (2)
(¥tn) (¥tn)
*2
*2
Non-consolidated Non-consolidatedForeign bond balance*1 and durationJGB balance*1 and duration
*1 Available for sale securities and securities being held to maturity *2 Available for sale securities
FY21H1 financial results Progress of the medium-term business plan
Approach to carbon neutrality Capital policy
21
-0.25%
0.00%
0.25%
0.50%
0.75%
1.00%(800)
(600)
(400)
(200)
0
200
Increase incredit costs
Reversal ofcredit costs
1.0 2.0 3.0 4.0 5.0 6.0
Total credit costs*1
Credit costs, risk-monitored loans-FY21 forecast of total credit costs revised to ¥150.0bn in light of the interim results
0.99%1.25% 1.25%
-1.50%
-0.50%
0.50%
1.50%
2.50%
0
500
1,000
1,500
2,000
2,500
08/3末 09/3末 10/3末 11/3末 12/3末 13/3末 14/3末 15/3末 16/3末 17/3末 18/3末 19/3末 20/3末 21/3末 21/9末
Asia
Domestic
EMEAAmericas
EndMar 08
EndMar 12
*1 Includes gains from write-off *2 Includes overseas branches *3 Sum of NICOS and ACOM on a consolidated basis *4 Sum of overseas subsidiaries of the Bank and the Trust Bank *5 Sum of other subsidiaries and consolidation adjustment *6 Total credit costs / loan balance as of end of each fiscal year *7 Risk-monitored loans basedon Banking Act. Regions are based on the borrowers’ locations *8 Total risk-monitored loans / total loans and bills discounted (banking accounts as of period end)
Risk-monitored loans*7
FY19 FY21(Forecast)
FY21H1
FY20FY20H1
∎ Historical trend(¥bn)(¥bn)
(222.9)
(515.5)
17.9
(150.0)
(350.0)
EndSep 21
EndMar 16
EndMar 20
FY06 FY21FY09 FY12 FY15 FY18
Credit cost ratio (right axis)*6
Risk-monitored loan ratio (right axis)*8
Average credit cost ratio from FY06
Of which partner banks (on MUFG consolidated basis)
(92.6)
6.7 38.6 70.0
(48.2)
(39.3) (39.1) (30.0)
(28.2)
(22.0) (18.8) (10.0)
FY20H1(Jan-Jun)
FY20H2(Jul-Dec)
FY21H1(Jan-Jun)
FY21Q3(Jul-Sep)
Current estimation
(¥bn) MUAH KS BDI
(169.1)
(54.6) (19.4)
30.0
Initialforecast
Revised
(¥bn) Bar chart Risk-monitored loans (left axis)
Total credit costs (left axis)
3Q Forecast of MUAH :Reversal of credit costs incurred upon agreement for the sale of shares in MUB
Consolidated
Consolidated
Non-consolidated*2 CF(Consumer Finance)*3
Overseas*4 Others*5
(258.4)
P.56
P.57
0.0%
0.5%
1.5%
2.5%
(0.25%)
FY21H1 financial results Progress of the medium-term business plan
Approach to carbon neutrality Capital policy
22
(¥bn) EndMar 21
EndSep 21 Changes
1 Common Equity Tier 1 capital 14,113.7 14,917.0 803.3
2 Additional Tier 1 capital 1,869.0 1,872.5 3.5
3 Tier 1 capital 15,982.7 16,789.6 806.9
4 Tier 2 capital 2,686.7 2,443.0 (243.6)
5 Total capital (Tier 1+Tier 2) 18,669.5 19,232.7 563.2
6 Risk-weighted assets 114,419.3 112,191.7 (2,227.6)
7 Credit risk 90,410.0 90,947.6 537.5
8 Market risk 4,066.8 4,280.8 214.0
9 Operational risk 7,976.6 7,888.8 (87.8)
10 Floor adjustment*3 11,965.8 9,074.4 (2,891.4)
11 Total exposures*4 292,725.0 292,447.5 (277.4)
12 Leverage ratio 5.45% 5.74% 0.28ppt
FY21H1 results
9.8% 9.7%10.7%
11.9% 12.3%13.2%
End Mar 20 End Mar 21 End Sep 21
Net unrealized
gains on AFS securities
Capital
CET1 ratio (Finalized Basel III reforms basis*2)
CET1 ratio ConsolidatedConsolidated
Consolidated
*1 Calculated by excluding impact of net unrealized gains (losses) on available for sale securities from RWA from the end of March 2021*2 Estimated CET1 ratio reflecting the RWA increase calculated on the finalized Basel III reforms basis*3 Adjustments made for the difference between risk-weighted assets under Basel I and Basel III*4 Deposits with the Bank of Japan is excluded in total exposures
9.6% 9.7%10.4%
11.7% 11.9% 12.5%
End Mar 20 End Mar 21 End Sep 21
Net unrealized
gains on AFS securities
*1
*1
*1
*1
23
Progress of the medium-term business plan (MTBP)
24
FY21H1 financial results Progress of the medium-term business plan
Approach to carbon neutrality Capital policy
-Net operating profit in customer segments steadily increased. Certain response of resource control such as expense and RWA
Financial targets
Target for ROE / Capital management
Profits Expenses RWA*6
3 drivers to achieve ROE target
ROE CET1 ratio (Finalized Basel III reforms basis*1)
5.63%
10.91%
7.5%
20年度 21年度中間期 23年度目標 中長期目標
9~10%
9.7%
10.4%
20年度 21年度中間期 23年度目標 中長期目標
9.5~10%
1,343.2
FY21H1
FXimpact
Perfor-mance-linked
expense*3
Expense for business growth
*3
Base expense
*3
FY20level*5
FY20H1
FY23target
1,317.3
*4
Base expense reduced to allocate funds to the area
of growth
Net operating profits Profits attributable to owners of parent
400.8
781.4
20年度 21年度 23年度目標
Progress ratio for revised target74.4%
*2
Over¥1tn¥1.4tn
733.1 634.1
20年度 21年度 23年度目標
+¥72.5bn in the accounts not included in
net operating profits
NOP increase in customer segments+¥45.9bn
117.8118.8
21/3末 21/9末 24/3末目標
End Mar 21
level
FY21
FY20
FY23target
FY21FY20 FY23target
(¥bn)
(¥bn) (¥tn)
FY21H1 FY23target
Mid- tolong-term
target
FY20 FY21H1 FY23target
Mid- tolong-term
target
FY20
Customer segments
End Sep 21
End Mar21
End Mar24 target
*1 Estimated CET1 ratio reflecting the RWA increase calculated on the finalized Basel III reforms basis. Excluding net unrealized gains on AFS securities *2 On a managerial accounting basis *3 On a managerial accounting basis (after adjustment) *4 Approximately +¥24.0bn *5 Excluding performance-linked expense *6 Estimated RWA on the finalized Basel III reforms basis. Includes net unrealized gains on AFS securities
25
FY21H1 financial results Progress of the medium-term business plan
Approach to carbon neutrality Capital policy
Basic policy
Be the premier business partner that pioneers the future through the power of finance and digital services
To cope with the drastically changing society,we commit to empower all stakeholders to move to the next step forward
-Position the 3-year term as the “3 years of new challenges and transformation.” Develop our business model to respond to the changes in environment and improve ROE
ROE 7.5%Becoming a financial group which constantly earns ¥1 trillion of profits attributable to owners of parent
Our vision after
3 years
Financial target
Key strategies
Structural reformsCorporatetransformation Strategy for growth
Digital transformation
Contribution to addressing environmental and social issuesTransformation of corporate culture (a culture with a focus placed on “speed” and “new challenges”)
Wealth management
Approach of proposing solutions to customer’s issues
Asia business
GCIB & Global Markets
Global AM / IS
Cost and RWA control
Transformation of platforms and our business infrastructure
Review of our business portfolios
26
FY21H1 financial results Progress of the medium-term business plan
Approach to carbon neutrality Capital policy
Money Canvas
• Deliver a broad range of offerings, including financial products with smartphone-based customer contact points
Money Canvas
Stock / Investment trust
Crowd-funding
Discretionary Investment,Robo-advisor
Insurance
Investment using points
Jointly-managed money trust
Offer comprehensive solutions supporting customers’ asset
formation endeavors
To be launchedin Dec. 2021
News, columns Evaluation ofinvesting style PurchaseSelection of
financial products
CorporateTransformation
Strategyfor growth
Structuralreforms
Digital transformation (1)
Biz Forward
• Billing service, credit extension service, guarantee of account receivable
• Support customers’ operational efficiency and reduction of credit controland management
• Fund-raise taking advantage of customers’ own receivables
• Quick response to unexpected funding needs due to procedures that can be completed online
Online factoringBilling agency
• Provide new financial services to SMEs
Biz Forward, Inc.(Established in Aug. 2021)
Launched in Nov. 2021 To be launched in Dec. 2021
-Enhance new services and contact points with individual and corporate customers via collaboration with external businesses
27
FY21H1 financial results Progress of the medium-term business plan
Approach to carbon neutrality Capital policy
VariousSolutionsfor digital
transformation
Alliance with
approx. 100 SaaS*1
providers
Customers(mainly
corporatecustomers)
MUFG Bank,Regional financial
institutions
• Database of case examples and products
• Recommend optimal solutions from case examples of problem solution
Problemsolutionplatform
Busikul
Promote customers’ digital transformation via “Busikul”
• Business Tech Co., Ltd, operator of “Busikul”, plans to become a consolidated subsidiary of the Bank (Nov. 2021)
• Plan to initiate the use of “Busikul” from FY22 to assist corporate customers in their digital transformation efforts
Off-line
On-line
Proposal
Sitevisit
Proposal
Collect problem solution cases in its database
Exhibit
*1 Software as a Service *2 Application Programming Interface *3 Mitsubishi UFJ DIRECT: Internet banking for individual customers
ID-linkage services (API*2 services)
Progmat• Publicly issued security tokens backed by real estate as underlying assets in Aug. 2021 (first case in Japan)
• ID-linkage services via the use of Direct*3 accounts• To be launched in Dec. 2021 (first case among Japanese banks)
-New initiatives to become a financial and digital platform operatorDigital transformation (2)
CorporateTransformation
Strategyfor growth
Structuralreforms
Securitize a varietyof assets and rights
Fulfill requirementsfor perfection
Reduce issuance andtransactional costs
Blockchain technology Trust bank function×
Provide security token platform which enables easy,speedy and secure financial transactions
XX Finance
ID
Password
Direct*3
Login
• Personal verification data held by the Bank can be used
• Authorization functions that satisfy the Bank’s security standards
Advantage to business operators
• Relieve users of workload associated with data entry tasks
• Users are no longer saddled with the cumbersome task of managing multiple IDs and passwords
Advantage to users
28
FY21H1 financial results Progress of the medium-term business plan
Approach to carbon neutrality Capital policy
• Targeting young generation such as Generation Zand Millennials
• Collaboration includes reward programs, etc.
-Accelerate open innovation collaborating with companies at home and abroad
Initiatives in Asia
• Signed financing agreements with seven start-ups• Increased the size of the fund to USD200mm in Sep. 2021
∎ Digital tech-driven financing for start-ups (Mars)
Support the growth of start-ups mainly in Asia-PacificPlan to launch a new fund to reach out to new customer classes
Financing by leveraging real-timedata gathering and AI technology
• Presence in Asia• Financial knowledge
& expertise
• AI analysis technology• Background in the
tech industry
Digital transformation (3)Corporate
TransformationStrategy
for growthStructuralreforms
• High speed scanning and indexing by making use of AI and robotics tech.
• Real time confirmation of image from branches via online
• Plan to digitize more than 300mm pages of paper documents over the next 5 years
• Has completed development for digitizing hanko forms via the utilization of technology offered by U.S.-based Ripcord, Inc.
• Has started digitization from Aug. 2021. Commission expenses associated with the storage of these forms has begun to decline
- Consider digitizing documents other than hanko formsand expanding the use of the technology to group wide
∎ Example of collaboration with investees
confirmation
Digitized Data
Confirmation
Digitizing hanko forms
Initiatives in Japan
∎ Invest in start-ups (MUIP*1)
No.1 FundCurrent valuation is well in excess of its book value
Develop collaboration with investees
No.2 Fund Expand the scope of
investment
Explore new formsof collaboration
Wealthmanagement
Non-financial areas/ESG
Alliance involving MUFG’s customers
• MUIP has invested in 24 start-ups (¥14.9bn in total) and has established a track record of collaboration with investees
• MUIP has established No. 2 fund (¥20bn) in Jul. 2021
• In Thailand, KS and Grab are meeting strong demand for loan to drivers and food merchants, building up the loan assets
• In Indonesia, BDI and Grab launched Co-Branding Credit Card in Nov. 2021
∎ Collaborations between Grab and Partner Banks
To food merchants(Launched
in Oct. 2020)
To drivers(Launched
in Sep. 2020)
20thd loans290% increase vs Mar. 2021
110thd loans110% increasevs Mar. 2021
# of loans disbursed
*1 MUFG Innovation Partners
29
FY21H1 financial results Progress of the medium-term business plan
Approach to carbon neutrality Capital policy
Transformation of corporate culture (1)
Overview of MUFG Way integration sessions
• Employees are urged to discover how relevant the MUFG Way is to their tasks and actions and, on this basis, to review the meaning of their duties
• Enhance mutual understanding between team members via dialogue
Purpose
*1 Executives of the Bank, the Trust Bank and the Securities HD, Group Head of each business group, and C-Suites attended
Enhance engagement
Accelerate transformation of corporate culture
Enhance corporate value
• Managers share their personal aspirations regarding the MUFG Way, engaging in dialogue with team members
Step 2
• Each employee strives to make the MUFG Way their own by examining how it overlaps with their personal beliefs and ambitions
Step 1My Way
Personal beliefs }and ambitions
MUFG WayPurpose of
the company
Dialogues through MUFG Way integration sessions
∎ Group CEO Kamezawa hosted a dialogue session to which corporate leaders were invited*1
A session held at the Bank’s Asakusabashi Branch
∎ Sessions were similarly held at branches and other business bases, with managers and their staffs discussing the MUFG Way
Prof. Kunio Ito, Hitotsubashi CFO Education andResearch Center and Group CEO Kamezawa
Cascade down
I would like to create a workplace in which everyone can work vibrantly in a fun way.
I was able to better understand my fellow team members after hearing what they really think!
The session gave me an opportunity to remember what I was aiming for when I just joined the workforce and thereby reflect on the meaning of my duties.
Mr. Nozaki,General Manager
I was able to empathize with my branch manager as he shared his frank thoughts on how he personally practices the MUFG Way!
-At MUFG Way integration sessions, each employee is encouraged to review the meaningof their duties
CorporateTransformation
Strategyfor growth
Structuralreforms
30
FY21H1 financial results Progress of the medium-term business plan
Approach to carbon neutrality Capital policy
Held round-table meetings involving applicants and the Group CEO as part of efforts to enhance employee engagement
I want to become a person capable of making changes after
acquiring experience outside the Bank
New business proposal Initiatives by business groups(from FY21)
Open EX
• Promoted initiatives to help all employees, ranging from young employees to executive officers, to freely voice their opinions regardless of their positions
“Karaoke” – reforming business structure• Investment Karaoke: 116 employees from in and outside of Japan
proposed new business• Business Innovation Karaoke : 37 teams of newer employees
proposed business innovations within MUFG• Strategy Karaoke : Business group executives also made proposals
Sandbox - seeking new business• 74 Proposals from the Bank, the Trust Bank and the Securities HD• Also held online conferences in which attendees are encouraged to
express their thoughts no matter their positions
Expected to be transferred to relevant department
Ms. Kitayama / The BankThrough the consolidation of expertise and information held by overseas bases, I will enhance business with overseas subsidiaries of our SME clients
Currently in product design processin Frontier Strategy Planning and Support Division
Mr. Aso / The Trust Bank
I will enhance the lineup of products targeting individual investors via real estate cloud funding
Assigned to Digital Service Planning Division in order to realize her own ideas
Ms. Arai / The Securities HDI will make a number of MUFG fans by creating a financial education app through which children can acquire financial literacy in a fun way
• Be exposed to different cultures via secondment to entities outside MUFG
• Acquire ability to take a speed-oriented management approach while enhancing digital skills
∎ Mr. Yoshioka is seconded to ChoQi, a cashless payment company specializing in serving hospitalsand pharmacies
JCIB
GlobalMarkets
• Employees are encouraged to spontaneously create project proposals based on an open-minded approach
Transformation of corporate culture (2)-Employees take on challenges, transcending boundaries between business units, job categoriesand positions. In line with their individual ambitions and, to this end, freely contribute their ideas
CorporateTransformation
Strategyfor growth
Structuralreforms
P.71
P.71
31
FY21H1 financial results Progress of the medium-term business plan
Approach to carbon neutrality Capital policy
Progress of net operating profits
FY20H1
減益要因 アジアPB 成長戦略構造改革 FY21H1
-The two key strategies are overall steadily progressing toward the MTBP target
(50.0)
Asia business*2
(25.0)
*1 Global Markets business group manages profits including accounts such as net gains(losses) on equity securities which are not included in net operating profits. These effects are considered (The effects in FY20H1 and FY21H1 were (¥30.9bn) and ¥41.6bn, respectively)
*2 For Asia business, the estimated decrease in net operating profits during FY21 by the impact of market conditions, etc. such as the impact of policy rate cut, is not included in the MTBP target of strategy for growth. The growth from FY22 is included
(¥bn)
(26.5)
Strategy for
growth
Structural reforms
Profits not included in
net operating profits*1
Losses not included in
net operating profits*1
0
10
20
30
40
Wealth Management
Asia business GCIB &Global
Markets
GlobalAM / IS
合計
MTBP target: approx. ¥150bn*2
Strategy for growth
0
10
20
30
Personnel(the Bank)
Overseas(the Bank)
Overseas(MUAH)
Others 合計
MTBP target: approx. ¥100bn
Structural reforms
Total
Total
*2
FY21H1 result*2:Approx. ¥35bn
FY21H1result:Approx. ¥17bn
(¥bn)
(¥bn)
Other factors of decrease- Loss of (30.0) overseassecurities- CVA (20.0)
733.1
CorporateTransformation
Strategyfor growth
Structuralreforms
Approach of proposing
solutions to customer’s
issues
Premise (facility, etc.),
others(the Bank)
634.1
32
FY21H1 financial results Progress of the medium-term business plan
Approach to carbon neutrality Capital policy
Progress of key strategiesKPI
Progress of key strategiesEnhancing business with
large-asset owners Human resources / infrastructure• WM-specialized staff at the
Bank amounting to 274∎ Amount of profiling for
large-asset owners∎ No. of customers covered by
WMPF*1
Dec 20 Jun 21 Sep 21 FY21H2
*1 Wealth management digital platform *2 Two offices at the Bank and the headquarters of the Trust Bank and MUMSS *3 Main offices in Tokyo, Nagoya and Osaka cities at the Bank, the Trust Bank and MUMSS*4 Global Macro & Asset allocation Perspectives: MUFG Wealth Management’s official view with regard to market outlook and investment trends
+Some
Offices*2
+SeveralMain
Offices*3
All offices2officesat the Bank
1.65mmindividuals
30thdindividuals
WM profits (¥bn)
CorporateTransformation
Strategyfor growth
Structuralreforms
1152
25
9372
177
89
223
Grossprofits
NOP
FY20 H1 FY20 FY21H1 FY23(plan)
Cross transactionsAsset management
Grossprofits
NOP Grossprofits
NOP Grossprofits
NOP
Strategy for growth (1) - Wealth Management (WM)
Asset management• No. of GMAP*4 users increased to 14thd of individual customers of
the Bank
Cross transactions
∎ Balance of investment assets from retail customers
∎ Gross profits from retail customer referrals
∎ No. of effective informationsharing for WM real estate
∎ No. of entrusted testamentary trust
24.3
26.0 26.4
19
43
24
(¥tn) (¥bn)
1,200
4,800
2,1003,300
7,900 8,100
+2.1
+4,800+900
+5
FY20H1 FY20 FY21H1 FY20H1 FY20 FY21H1
FY20H1 FY20 FY21H1 FY20H1 FY20 FY21H1
BK TB MUMSSBK TB
BK MUMSS
BK TB MUMSSBK TB MUMSS
BK
FY20H1
FY21H1
2times
- The steady execution of key strategies resulted in year-on-year increases in both gross profits and net operating profits
33
FY21H1 financial results Progress of the medium-term business plan
Approach to carbon neutrality Capital policy
∎ Lending spread associated with new loans*5
・Approx. +0.2% vs FY19H1
19 20 21
93 100
38 31 41
19年度 20年度 21年度
年度 中間期
34.8 34.3 33.4
中間 20年度 21年度 23年度
JCIB’s financial highlight (FY21H1)
Gross profits Net operating profits
YoY+¥6.0bn
YoY+¥6.5bn
RWA
YoY¥(1.4)tn
Equity holdingsApprox. selling amount*1
(Acquisition cost basis)¥46bn
Strategy for growth (2) - Approach of proposing solutions to customer’s issues
-Steady progress in “staircase management” thanks to the promotion of ROE-focused initiatives and the strengthening of capabilities to address customer’s management issues
【KPI】
0.36%0.38%
0.40%
0.66%0.68%0.72%
20上 20下 21上 23
Non-JPY
JPY
FY23FY20H2
FY21H1
FY20H1
ROE-focused initiatives, strengthening real estate business
*1 Sum of the Bank and the Trust Bank including R&C *2 Revised FY20 result *3 Results of JCIB (the Bank, non-consolidated basis) *4 Calculated as net interest income / average loan balance of said period *5 Mid- to long-term lending spreads on a consolidated basis of JPY and non-JPY (including non-JPY mid- to long-term funding costs) *6 Real estate-related net interest income, brokerage fees, etc. *7 Excluding bonds issued by MUFG
*8 Comparison of cumulative underwriting amount and share of public domestic green bonds by a domestic issuer (Apr. 1, 2016-Sep. 30, 2021)
Strengthening sustainable business
RWA*2 (¥tn) Lending spread*3*4 ∎ Underwriting amount of ESG bonds*7 (¥bn)・#1 (in Japan)*8
∎ Real estate revenue*6 (index)・Increased YoY in FY21H1
(FY20=100)
FY20 FY23FY21H1
FY20H1 2019 2020 2021FY21
H1FY20H1
FY19H1
FY21H1
FY20H1
FY19H1
85.5
Full-year
CorporateTransformation
Strategyfor growth
Structuralreforms
178.9229.7
FY21FY20FY19
Interim
∎ Example・Invested US$25mm in California’s largest hydrogen fuel stations business (Nov. 2021)
COVID-19impact
34
FY21H1 financial results Progress of the medium-term business plan
Approach to carbon neutrality Capital policy
Strategy for growth (3) - Asia business
15.231.4
61.6
FY19H1
FY20H1
FY21H1
FY21Forecast
▲6.6%
0.7%
3.7%3.0%
3.2%
5.9%
▲2.1%
6.1%
2020 2021Forecast
2022Forecast
8.3% 8.8%
2.6%5.2%
FY20 FY21H1
Support the growth of BDI
*1 (Source) IMF “World Economic Outlook Database, Oct 2021” for Indonesia and Bank of Thailand “Monetary Policy Report, Aug 2021” for Thailand *2 (Source) Gaikindo, “Indonesian Automobile Industry Data” *3 ROE based on local disclosure standards *4 Current account and savings account*5 An auto loan subsidiary of BDI
-Despite the impact of the resurgence of COVID-19, the initiatives are steadily progressing in anticipation of economic recovery Macroeconomic environment in Thailand and Indonesia
• GDP growth rate is expected to deviate downward from initial assumptions, but to recover from 2022 onwards
• New automobile sales in Indonesia are recovering, and BDI’s loan balance is expected to increase
【KPI】 ROE*3 of KS and BDI Including gains on sale of interest in KS’s affiliate
• Established a collaboration framework between MUFG and BDI• Increased the balance of synergy loans and deposits
ThailandIndonesia
※Solid line as of Oct. 2021Dashed line as of Oct. 2020
GDP growth rate*1 New vehicle sales*2 in Indonesia
14.2%
MUFG BankJakarta Branch BDI
Selection of targets mainly for non-Japanese corporate clients. Approach together with MUFG and BDI
One Team (Virtual unit)GCIB & MUFG
Bank Transaction Banking Div.
• Former KS’s Retail CF Head appointed as Commissioner of BDI• Began new initiatives at BDI and Adira Finance*5
Housing loan
Auto loan
Integrated BDI/MUFG approach to developers
Enhance product competitiveness
Enhance credit analysis on loans to dealers
Utilize BDI’s branches and RMs
4.2
15.716.5
FY19H1
FY20H1
FY21H1
FY21Forecast
Approx.four times
Synergy loan balance(¥bn)
Synergy CASA*4 balance(¥bn)
KS
BDI
Collaboration with MUFG
Initiatives in consumer finance (CF) by sharing KS’s expertise with BDI
6,466
3,987
4,850
1,043 578 765
2019 2020 2021Forecast
MotorcycleAutomobile
(1,000 units)
Approx.four times
CorporateTransformation
Strategyfor growth
Structuralreforms
(2.1%)
(6.6%)
35
FY21H1 financial results Progress of the medium-term business plan
Approach to carbon neutrality Capital policy
1.4% 1.7%
#17 #18
#12
20年度 21年度中間期
23年度目標
2.7% 2.8%
#12 #12 #10
20年度 21年度中間期
23年度目標
47.6% 43.6%51.5%
Strategy for growth (4) - GCIB & Global Markets
U.S. / NIGGlobal / IG
【KPI】 【KPI】*7
FY20
• MUFG’s wallet share expanded in both IG*5 and NIG*6 fields
• FX, rates and in transactional other businesses struggled due to global stagnation flows
GCIB-Global Markets combined ROE*1 Syndication/DCM wallet rank & share*4
Institutional investor portfolio ratio*2 Non-interest income ratio
*1 Targeted domains: Overall GCIB + Global Markets S&T (excl. Japanese Corporate sales) *2 Lending amount in managerial basis *3 Figure as of End Jun 21*4 Source: Dealogic (Calendar year basis) *5 Investment Grade (Transactions with Investment Grade companies)*6 Non-IG (Transactions with Non-Investment Grade companies) *7 After adjustment of one-time impacts
FY21H1 FY23plan
3.6%
6.1%7.5%
FY20 FY21H1 FY23plan
11.8% 13.2%
20.0%
FY20 FY21H1 FY23plan
【KPI】
2023plan
2023plan
*3
2020 2021(Jan-Sep)
2020
CorporateTransformation
Strategyfor growth
Structuralreforms
2021(Jan-Sep)
• Lending spreads improved and secured finance for institutional investors made steady growth
• The reversal of credit losses due to recovery of the credit environment contributed to ROE improvement
• The balance of secured finance for institutional investors expanded steadily
-Made steady progress in the institutional investors business. Capturing transactional flows in the expected market recovery is one of the keys for further growth
36
FY21H1 financial results Progress of the medium-term business plan
Approach to carbon neutrality Capital policy
Strategy for growth (5) - Global AM / IS
Global IS
*1 Three-year performance trend as of end Jun 21. Proportion of AuM achieving asset management performance in excess of benchmarks*2 Gross profits from fund finance, fund FX, interest income *3 Asset under Administration from alternative funds
-Steadily moved forward in terms of measures to realize our vision for global AM/ISoperations, with KPIs indicating solid progress
Global AM• Received a greater volume of performance fee thanks
to the robust performance of infrastructure fund • Delivered combined solutions including fund finance and
other high-value-added services
Progress at the end of first half and future initiatives Progress at the end of first half and future initiatives
FY23(plan)
FY20 FY21H1 FY23(plan)
FY20 FY21H1
Base fee, etc.Performance fee
10.09.9
3.0
33%
13%
FY20H1 FY21H1
MUFG ISIndustryaverage
Growth rate of AuA*3Performance
(Outperformance ratio*1)
84%(Target+9%)
• Our flagship funds, such as those associated with Asia stocks, performed in excess of target
∎ Progress
• Develop new products by employing seed investment
• Continue to consider new investmentsaimed at strengthening our functions
∎ Future initiatives
• Growth rate of AuA is higher than the industry average thanks to synergistic effects from combined services
∎ Progress
• Enhance the content ofESG-related services
• Continue to consider newinvestments aimed at strengthening our functions
∎ Future initiatives
22.0
15.0
8.0
【KPI】 Global AM NOP(¥bn) 【KPI】 Gross profits from banking business*2
(¥bn)
CorporateTransformation
Strategyfor growth
Structuralreforms
37
FY21H1 financial results Progress of the medium-term business plan
Approach to carbon neutrality Capital policy
(Reference) Collaboration with Morgan Stanley-Progress in investment banking and WM fields
WM digital platform
*1 Asset managers *2 Financial sponsor companies such as private equity fund management companies*3 From April to September 2021. DCM includes domestic and foreign bonds. Source is as follows.
Domestic bonds: data complied by MUMSS based on REFINITIV and DealWatchDB. Foreign bonds: datacomplied by MSMS based on corporate disclosure data, Dealogic, Bloomberg, IFR, and Informa. ECM: data complied by MUMSS based on REFINITIV.M&A: data complied by MUMSS based on REFINITIV and any Japanese involvement announced *4 Customer Relationship Management
R&CInstitutional investor / Non-IG business GCIB
Primary business for Japanese corporates JCIB
∎ Major collaborations• Became co-lead managers in the public placement of
Renesas Electronics’ shares• Together served as arrangers, underwriters and lenders
in the issuance of Mercari’s convertible bonds
∎ League table *3
• Secured top tier share in investment banking field by taking full advantage of the combined strengths of MUFG and MS
• First collaboration deal in M&A finance to Non-IG corporate • Leveraged MS’s know-how in the course of developing MUFG’s unique platform
• Plans call for full-scale launch in the second half of FY2021
MUFG integrated CRM*4 function• Consolidated
and made it easy to check customer information
MUFG
Holistic View
• Distribute timely and optimal recommendations
• A tool for making proposals based on the customer’s goal
Next Best Action Goal Planning SystemProposal tool based on total assets
BK MUMSSTB
MUFGCustomer
MUFG
Customer
Analytics
Asset managementAsset successionBusiness succession
Customers’ goals based on
their life events
Goal
Account activity
information
Past cases
Recommendation function
Leverage strong sponsor coverage and MS‘s M&A advisory expertise
SolutionBalance Sheet
Assetmgmt.
Realestate
LoanTesta-
mentarytrust
Underwriting of M&A finance
Non-IG CorporateInstitutional investors(AM*1, Sponsor*2)
Bond/note(Distribution to
bond/note investors)
Loan(Distribution to loan
investors)
#1DCM #2ECM #1M&A
38
FY21H1 financial results Progress of the medium-term business plan
Approach to carbon neutrality Capital policy
FY20H1 Personnel Premise(facility etc.),
others
Overseas(the Bank)
Overseas(MUAH)
KS / BDI FY21H1
Expenses*1
Cost and RWA control – Expenses
*1 Internal managerial figure
Expenses (the Bank including MUAH, KS, BDI)*1
FY21H1 MUFG total expenses
Approx.64%
BKTB
SCHD
NICOS・ACOM
(¥bn)
Domestic
FXfluctuation
12
Performance-linked expenses
1Expenses for
business growth14
Global AM/ISWM etc.
Base expenses(13)
FY20H1 FY21H1
System4
Domestic(27)
Overseas10
(¥bn)
1,317
1,343
FX fluctuation
24
CorporateTransformation
Strategyfor growth
Structuralreforms
-FY21H1 expenses stayed almost unchanged YoY excluding the impact of FX fluctuationdue to maintained prudent control by the reduction of base expenses
(19)(5)
39
FY21H1 financial results Progress of the medium-term business plan
Approach to carbon neutrality Capital policy
116.7
117.8
118.8
112
114
116
118
End Mar20
End Mar21
DS R&C JCIB GCIB GCB AM/IS GlobalMarkets
為替影響等
End Sep21
(¥tn)
0
Cost and RWA control – RWA*1
FXfluctuation,
others
CorporateTransformation
Strategyfor growth
Structuralreforms
*1 Estimated RWA on the finalized Basel III reforms basis. Includes net unrealized gains on AFS securities
-RWA, excluding the impact of FX fluctuation, etc., declined through disciplinedRWA management
40
FY21H1 financial results Progress of the medium-term business plan
Approach to carbon neutrality Capital policy
Review of our business portfolio – Sale of MUB
*1 Acquired 100% ownership of UnionBanCal Corporation (currently MUAH), parent company of Union Bank of California (currently MUB) *2 Profits attributable to owners of parent *3 UnionBanCal Corporation until FY13 *4 Estimated tangible book value of US$ 6.25 bn to be delivered at the closing
*5 US$ 593 mm. Internal managerial figure (FY2020) *6 Subject to approvals from relevant regulators and fulfillment of preconditions for the closing
November 2008:Acquired 100% ownership of MUB*1
• Contributed to MUFG’s revenues for more than a decade, building on its California-based track record spanning over 150 years
First half of 2022:Closing of the transaction (Expected)*6
September 2021:Decided to sell all shares of MUB to U.S. Bancorp
P.63Consideration of approx. US$ 8.0 bn• Price / TBV*4: Approx. 1.3x• Price / Earnings*5: Approx. 13.5x
Agreed to sell MUB for an appropriate transactional price
MUBUnlock MUB’s potential
franchise value by integrating with U.S. Bancorp
MUFGOptimize management resource
allocation to improve shareholder value
MUB’s customers
Access to USB’s high quality financial services
MUFG’s Management ChallengesBusiness environment surrounding MUB
∎ Reshape global business∎ Increasing importance of scale and IT investments in retail business
Strategic importance of the U.S. market remains unchanged
Use of released capital
• Streamline operations and systems• Indirect involvement in the U.S. retail and commercial
banking businesses• Collaborate in businesses with Japanese customers and
the digital field• Giving comprehensive consideration to shareholder
returns, investment in growth areas, etc.
Capital and business alliance with U.S. Bancorp
• Focus on corporate transactions through collaboration among the Bank, the Trust Bank and the Securities as well as the strategic alliance with Morgan Stanley
Future direction
∎ Contribution amount to MUFG’s net income*2 by MUAH*3
04080
120
FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20
(¥bn)
CorporateTransformation
Strategyfor growth
Structuralreforms
-Decided to sell MUB with an eye to optimally allocating management resources
41
FY21H1 financial results Progress of the medium-term business plan
Approach to carbon neutrality Capital policy
Divestm
ent
(Reference) History of strategic investment
Approx. ¥76bn
AM/IS business group’s ROE=33.5%
*1 Initial investment amount *2 Butterfield, Meridian, UBS AFS, Capital Analytics, Rydex, Point Nine, Maitland *3 Approx. US$17.6bn which is expected as the total transaction value is converted into ¥ using actual exchange rates as of end Sep 2021. The completion of the share transfer is subject to certain conditionsprecedent, including the approval from relevant regulators, and is expected to be effective in CY2022 H1
Strategicinvestm
ent
Approx. ¥36bn
2020
Approx. ¥2tn*3
2021
Approx. ¥78bn
2020
7 acquisitions*2
Approx. ¥300bn
2012–2015 2020–20212016–2019
Approx. ¥47bn
Investment in open innovation
over 30 investees
2016–2021
20192013–2020
Approx. ¥63bn*1
2012
Approx. ¥536bn*1
2013 2016
Approx. ¥89bn*1 Approx. ¥687bn
2017-2019
Approx. ¥68bn
2017
Approx. ¥45bn
2018
Approx. ¥49bn
2019
Approx. ¥10bn
CorporateTransformation
Strategyfor growth
Structuralreforms
Asiancommercial
banks
Digitalrelated
GlobalAM/IS
42
Approach to carbon neutrality
43
FY21H1 financial results Progress of the medium-term business plan
Approach to carbon neutrality Capital policy
517657
466349
0200400600800
World ave. Asia-pacific ave.
Japan ave. MUFG
Net-zero financed emissions (FE)*1
-Set 2030 targets, beginning with “Electricity” and “Oil and Gas” sectors
Progress on setting interim targets
(g-CO2 / kWh)
Steps to set targets per sector
1. Identify priority sectors
4. Set interim targets
Determine value chain scope
Determine emission scope Select target metrics
(absolute emission/ intensity)
Choose benchmark scenarios
Key considerations
• Follow a scientific approach consistent with the Paris Agreement
• Accelerate our efforts to net zero GHG emissions‒ Set 2030 interim target within a year of joining
Net zero in asset management business
Joined NZAMI*5 in November 2021
Current FE (intensity) *2 for “Electricity”- “Oil & Gas” will be disclosed in spring 2022
New update
Disclose 2030 interim targets for “Electricity” and “Oil & Gas” sectors in spring 2022
• We will continue to set interim targets for other carbon-intensive sectors as advised by NZBA*4
Progress Report to be publishedNext step
Average emission intensity of electricity sector in each region*3
*1 Greenhouse Gas (GHG) emissions financed by loans and investments *2 Corporate finance and project finance assets related to Scope 1 of the power generation business in the electricity sector are measured (as of Dec. 2019)*3 Based on 2019 results from the IEA World Energy Outlook 2021 *4 Net Zero Banking Alliance: An initiative for banks that are committed to achieve net zero in their lending and investment portfolio by 2050 *5 Net Zero Asset Managers Initiative: An initiative mainly for asset managers that are committed to achieve net zero in their investment portfolio by 2050
2. Measure current FE
3. Discuss target setting methodologies
44
FY21H1 financial results Progress of the medium-term business plan
Approach to carbon neutrality Capital policy
Decarbonization through financial services-A virtuous cycle between environment and economy:
seizing business opportunities in the process of supporting customers’ decarbonization
Enhancing customer engagement
Sharing customers’ issues and continue
dialogue
Enhancement of engagement
Enhancement
of solutions
Interviews with approx. 200 companies
(Japanese and non-Japanese),Held discussion betweencustomers and investors
MUFG's new solutionsProgress in sustainable finance
・・・Efforts in FY2021H1
*1 Such as the working group for measuring, reporting and disclosing GHG emissions in accordance with the revision of Act on Promotion of Global Warming Countermeasures *2 Taskforce on Scaling Voluntary Carbon Markets
Current solutions
Sustainability-linked loansForeign sustainability bonds
Transition bondsRenewable energy funds
∎ Strengthening solutions such as sustainability bonds through cooperation with the Bank and MUMSS
∎ Consideration of the possibility of utilizing satellite data∎ Consideration of how to measure social impact other than
GHG emissions (Impact investment, etc.)
SolutionAgreement on collaboration with Zeroboard Inc.
∎ Helping customers measure GHG emissions
Formulation of rules∎ Participation in Ministry working group*1
Solution
Leading “Asia Transition Finance Study Group”
∎ Development of transition guidelinesFormulation
of rules
First ESG accelerator held by a Japanese bank
∎ Promoting innovation through support for start-ups
SolutionInvestment in a developer and distributor ofhydrogen fuel station in California
∎ Acquisition of know-how on utilization of carbon credits
Formulation of rulesParticipation in TSVCM*2
∎ Revitalization of the carbon credit market
OptimumIn future
VisualizingGH
G emissions
Reduction plan/Execution
CabonO
ffset
Green loansGreen bonds..
Nov.
Dec.
Sep.
Nov.
Aug.
• Proactively engaging in sustainable finance
10.4
35.0
010203040
FY2019 - FY2021H1 FY2030
(¥tn)
FY2021H1(Of which, environment 4.3)
(Of which, environment 18.0)
GoalTotal from FY2019 to FY2030
FY2019-2020
Cumulative total
In 2021
45
FY21H1 financial results Progress of the medium-term business plan
Approach to carbon neutrality Capital policy
Electricityprocured directly by
BKTB
SCHD in Japan
0
50
100
150
200
Emissions in FY2020(Result)
<Ref>FY2021
(Forecast*1)
Decarbonization of our own emissions
Generating green electricity Buying green electricity
• Made significant progress in measuring MUFG’s FY2020 emission volume on a group and global basis
• Expand the scope of invested assets and participants other than MUFG
Renewable energy fund: Z Energy Co., Ltd. *4
Japan USEU/Middle
eastAsia/
Oceania*3
Total (thd t-CO2)*2 187 46 4 119Scope1
direct emission 14 3 0 12
Scope2 indirect emission 173 43 4 107
Significant reduction of GHG from own operations Measurement of GHG emissions on a global basis
-Made significant progress in reducing GHG emissions from our own operations in Japan and measuring our GHG emissions on a global basis
Shifted domestic electricity procurement directly by the Bank, the Trust bank, the Securities HD to 100% renewable sources by Nov. 2021-The original target was end Mar. 2022
Completed ahead of schedule
∎ Emissions from all domestic consolidated subsidiaries(Thd t-CO2)
*1 Estimated volume calculated by deducting the effect of shifting to renewable energy from the volume of emissions in FY2020*2 Determined the scope by operational control approach of “GHG protocol” and measured by the market criteria*3 Exclude KS’s subsidiaries. The figures may change in the future due to changes in calculation methods through third-party audits and certification*4 The new company established by the Bank for the launch of renewable energy fund
*1
Using renewable energy
Z Energy
Retailingpower
Purchasing powerOfftake (PPA) Agreement
Shareholders of Z Energy
MUFG,others
Invested assets
Invest-ment
*1
Shifting to 100% renewable sources has been completed by November 2021
60%
• Electricity used for tenant occupancy
• Electricity procured by other domestic subsidiaries
187
107
Generating renewable energy
46
FY21H1 financial results Progress of the medium-term business plan
Approach to carbon neutrality Capital policy
Carbon Neutral PT Steering Committee
Enhancement of structure / participation in global initiatives-Made our initiatives move forward by establishing a groupwide and cross-regional structure both internally and externallyNew organizational structure for carbon neutrality Participating proactively in global initiatives
• Organized a project team and holds steering committee meetings every two months
• Established Global Head of Sustainability Engagement
• Acquiring external knowledge including scientific approach know-how on a global basis
Increasing our knowledge by acquiring external expertise
• Researching pathway to decarbonization and contribution of finance with the University of Tokyo. Launched ETI-CGC*1
with them and major domestic companies• Holds training sessions by external experts for top
managements and relationship managers etc.• Recruited an external expert as a head of SBD*2
Board of Directors
Executive CommitteeSustainability Committee
Through financing
Our own emissions
Responsible investment
Business, client engagement
Risk management
Setting targets, measure emissions
by sectorPartner banks Enhancement of
disclosure
Enhancingintelligence
function
Eight working groups on a group and global basis
Our own emissions
*1 ETI-CGC(Energy Transition Initiative-Center for Global Commons)is an initiative comprising the University of Tokyo and 13 major Japanese companies to achieve decarbonization *2 Sustainable Business Division
June 2021Set GHG emission targets
First in Japan
Elected as a Steering Group member
August 2021Measure
GHGemissions
August 2021
Set GHGEmissiontargets
November 2021
Research & develop
rules
Communicate
NET-ZERO BANKING ALLIANCE
NET ZERO ASSET MANAGERS INITIATIVE
47
Capital policy
48
FY21H1 financial results Progress of the medium-term business plan
Approach to carbon neutrality Capital policy
Basic policy (“Capital Triangle”)-Implement well-balanced capital management
*1 Estimated CET1 ratio reflecting the RWA increase calculated on the finalized Basel III reforms basis. Excludes net unrealized gains on AFS securities
MUFG’sCorporate
Value
Progressive increase in dividends, flexibleshare repurchase
Enhance furthershareholder returns
Focusing on capturing returns in existing investmentsand continuous consideration of new investments ingrowth areas such as digital and global AM/IS, etc.
Strategic investments for sustainable growth
CET1 ratio*1 target: 9.5%-10%
Maintain solid equity capital
49
FY21H1 financial results Progress of the medium-term business plan
Approach to carbon neutrality Capital policy
Basic policies for shareholder returns-Improve shareholder returns, focusing on dividends
Consider• Performance progress /
forecast and capital situation• Strategic investment opportunities• Market environment including share price
• Holding a maximum of approx. 5% of the total number of issued shares
・ Progressive increase in dividends・ Target a dividend payout ratio of
40% by the end of FY23Progressivedividends
Sharecancellation
Flexibleshare
repurchase
50
FY21H1 financial results Progress of the medium-term business plan
Approach to carbon neutrality Capital policy
当期利益… 当期利益の…• Termination of special treatment of investment in MS (terminate in FY22)
• Maintain end of FY20 level(improve profitability by replacing assets)• Accumulate profit within the target range in accordance with business
environment prospect
• Progressive increase in dividend with a dividend payout ratio target of 40%
• Leverage capital surplus created by accumulation of net profits*2
and the sale of MUB as an additional fund for shareholder returns and investment for growth
Capital management policy
Around¥3tn
Share repurchaseInvestment for growth
Profit accumulation
Double gearing
RWA control
Dividend
-CET1 ratio target at 9.5%–10.0%. Align our approach to capital management with CET1 ratio
Capital management policy*1 Breakdown of net profits*2 during MTBP period (image)
CET1 ratio
8.5%
9.5%
10.0%
• Consider: Stable dividend in line with profits
• Implement: Accumulate capital toimprove CET1 ratio to the target range while practicing prudent risk management
• Implement: Revisit the policy of shareholder return, capitalreinforcement, and reduction of risk
• Maintain: Progressive dividend• Implement: Additional shareholder
return, investment for growth
• Maintain: Progressive dividend• Consider: Additional shareholder return,
investment for growth, accumulation ofcapital within the target range
Targetrange
1
2
3
4
5
12
3
4
5
Net profits*2
(accumulation)
*1 Estimated CET1 ratio reflecting the RWA increase calculated on the finalized Basel III reforms basis. Excludes net unrealized gains on AFS securities*2 Profits attributable to owners of parent
Minimumrequirement
Net profits*2
(allocation)
(End Sep 21)
Additional capital createdby the sale of MUB
51
FY21H1 financial results Progress of the medium-term business plan
Approach to carbon neutrality Capital policy
(0.2%)
0.1%0.7% 0.1%
CET1ratio
(End Mar 21)
CET1ratio
(End Sep 21)
CET1ratio
(End Mar 22)
Net profits*2 Dividend
9.7%
10.4%
DividendRWAdecrease
Sharerepurchase
FY21H2 forecastFY21H1 results
Others Double-gearing
RWAincrease/decrease,
etc.
Capital allocation
Capital allocation results and forecast*1
Net profits*2
*1 Estimated CET1 ratio reflecting the RWA increase calculated on the finalized Basel III reforms basis. Excludes net unrealized gains on AFS securities*2 Profits attributable to owners of parent
52
FY21H1 financial results Progress of the medium-term business plan
Approach to carbon neutrality Capital policy
¥13 ¥16 ¥18 ¥18 ¥18 ¥19
¥22 ¥25 ¥25
22.0% 23.4% 24.6% 26.3% 26.4% 25.5% 32.9% 61.0%
Dividend per share Dividend payout ratio
FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21(forecast)
Dividend 184.1 226.6 253.7 249.3 243.6 251.8 286.9 322.9 321.8 359.3Share repurchase - - 100.0 200.0 200.0 200.0 150.0 50.0 - 150.0
Total payout 184.1 226.6 353.7 449.3 443.6 451.8 436.9 372.9 321.8 509.3
Net profits*2 852.6 984.8 1,033.7 951.4 926.4 989.6 872.6 528.1 777.0 1,050.0
Total payout ratio 22.0% 23.4% 34.2% 47.2% 47.9% 45.7% 50.1% 70.5% 41.3% 48.5%
Results of shareholder return
FY21H1 concepts of shareholder returnResults and forecast for FY21
*1 Dividend payout ratio excluding the impact of one-time amortization of goodwill: 37% *2 Profits attributable to owners of parent
¥28
Interim¥13.5
Year-end¥14.5
(¥bn)
*141.3% 34.2%
Dividend
Share repurchase
-FY21 DPS forecast is revised upward by ¥1. Resolved to repurchase own shares up to ¥150bn
¥1
Resolved to repurchaseown shares up to ¥150bnUpward revision
of profitsDisciplined RWA
control
Creation of capital surplus
Leverage capital surplus as a fund foradditional shareholder return in linewith our capital management policy
• Revised FY21 target upward by ¥200bn to ¥1,050bn
• Accelerate dividend increase to achieve our dividend payout ratio target for the final year of the MTBP
Net profits*2:¥1tn or above
Dividend payoutratio: 40%
FY21 DPS forecast wasrevised upward by ¥1
53
FY21H1 financial results Progress of the medium-term business plan
Approach to carbon neutrality Capital policy
Reduction of equity holdings*1
-Reduce equity holdings by ¥300bn and more between FY21-23. Reduced ¥46bn in FY21H1
Approx. selling amountHistorical performance*2
Amount of sale
Net gains (losses)Acquisition
cost basis(¥bn)
FY15 211 117 94
FY16 267 149 118
FY17 318 201 117
FY18 242 127 115
FY19 240 139 101
FY20 267 137 130
FY15-20Total 1,545 870 675
FY21H1 131 46 85
FY21-23Target 300 and more
Agreedamount(End Sep 21)
- 172 -
*1 Sum of the Bank and the Trust Bank *2 Acquisition price of domestic equity securities in the category of ‘other securities’ with market value (consolidated) *3 Total amount of sale
9.20
2.79
1.86 1.82
End Mar02
End Mar15
End Mar21
End Sep21
End Mar24
3years
(¥300bn and more)*3
(¥870bn)*3
(¥tn)
54
Appendix
55
Income Statement
Income Statement Summary
(¥bn) FY20H1 FY21H1 YoY
1 Gross profits*1
(before credit costs for trust accounts) 2,057.8 1,980.8 (76.9)
2 Net interest income 966.5 992.4 25.9
3 Trust fees+Net fees and commissions*1 655.2 744.7 89.4
4 Net trading profits+Net other operating profits 436.0 243.6 (192.3)
5 Net gains (losses) on debt securities 201.9 70.5 (131.3)
6 G&A expenses *1 1,317.3 1,343.2 25.9
7 Net operating profits 740.4 637.5 (102.8)
8 Total credit costs (258.4) 17.9 276.3
9 Net gains (losses) on equity securities 24.2 126.0 101.7
10 Net gains (losses) on sales of equity securities 39.7 131.2 91.4
11 Losses on write-down of equity securities (15.5) (5.2) 10.3
12 Equity in earnings of equity methodinvestees 153.1 218.3 65.1
13 Other non-recurring gains (losses) (69.2) (13.9) 55.3
14 Ordinary profits 590.2 986.0 395.7
15 Net extroadinary gains (losses) (17.6) 69.9 87.5
16 Total of income taxes- current andincome taxes-deferred (132.3) (225.7) (93.3)
17 Profits attributable to owners ofparent 400.8 781.4 380.6
18 EPS (¥) 31.21 60.87 29.65
1
2
3
4
*1 From FY21, expenses related to credit cards, which were previously recorded as G&A expenses, are recorded as fees and commissions expenses. The amount of retroactive adjustment in FY20H1 was ¥35.1bn *2 Impact of FX translation was approximately ¥24.0bn
Consolidated
Gross profits• Net interest income increased due to improvement of
lending spread for overseas and domestic corporate as well as profits from investment trust cancellation
• Trust fees, and net fees and commissions increased mainly due to investment product sales at domestic subsidiaries and fees and commissions at FSI
• Due to the lack of net gains on debt securities earned in the previous year, gross profits decreased ¥76.9bn YoY
G&A expenses / Expense ratio• Expense ratio rose to 67.8% due to a decrease in gross
profits. G&A expenses remained almost the same level as the FY20H1 excluding impact of FX translation*2
Total credit costs• Total credit costs decreased significantly mainly due to
improved credit quality and reversal of the allowance reflecting an improvement of economic environment outlook in U.S.
Profits attributable to owners of parent• Profits attributable to owners of parent increased
¥380.6bn to ¥781.4bn, including an increase of ¥101.7bn net gains on equity securities reflecting steady stock markets as well as ¥65.1bn equity in earnings of equity method investees, mainly from Morgan Stanley
1
2
3
4
56
Credit cost ratio*6
=Total credit costs*5
Full-yearforecast(350.0)
(150.0)
0.09%
0.30%
0.62%
0.90%
0.44%
0.23%
0.13%
(0.01%)
0.15%0.22%
0.14%0.04% 0.01%
0.20%
0.48%
FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21H1
Credit costs
(155.3)
(255.1)
(161.6)(115.6)
(193.4)
(354.1)
(760.1)
(570.1)
(261.7)
(75.6)
11.8
(46.1) (5.8)
(222.9)
(515.5)
Non-consolidated*1 CF(Consumer Finance)*2
Overseas*3 Others*4
(¥bn)
Average credit cost ratio
from FY06
*1 Including overseas branches *2 Sum of NICOS and ACOM on a consolidated basis *3 Sum of overseas subsidiaries of the Bank and the Trust Bank *4 Sum of other subsidiaries and consolidation adjustment *5 Including gains from write-off *6 Total credit costs / loan balance as of end of each fiscal year
Non-consolidated 61.5 (50.1) (357.8) (361.6) (174.2) (134.5) (65.3) 35.1 (71.1) (103.7) (47.9) 79.5 129.8 12.6 (223.2) 74.1
CF (133.0) (152.1) (91.0) (232.2) (135.0) (50.1) (33.7) (35.7) (44.1) (51.6) (64.5) (83.6) (81.7) (87.6) (64.4) (30.7)
Overseas 0.7 (17.8) (59.7) (110.6) (2.7) 16.1 (0.8) 9.2 (63.2) (100.8) (45.0) (42.7) (52.3) (141.6) (232.3) (20.7)
Others (4.9) (41.5) (61.5) (55.7) (42.1) (24.9) (15.6) 3.2 16.9 1.0 2.1 0.8 (1.5) (6.2) 4.5 (4.7)
[Breakdown]
Interimresults17.9
Increase incredit costs
Reversal ofcredit costs
57
Risk-monitored loans*1
*1 Risk-monitored loans based on Banking Act *2 Total risk-monitored loans / total loans and bills discounted (banking accounts as of period end)*3 Based on the locations of debtors*4 End Mar 2008 – End Mar 2012 includes parts of other regions*5 End Mar 2008 – End Mar 2012 includes only US
(¥bn)
EMEA*4 21.2 42.6 136.3 121.2 127.2 122.0 126.3 88.2 133.9 116.0 71.3 64.0 63.7 134.7 119.0
Americas*5 24.8 81.2 147.3 110.3 89.2 125.0 114.9 100.7 199.4 216.0 157.5 148.2 145.5 224.7 204.7
Asia 13.1 15.4 14.4 9.4 14.4 17.0 89.0 108.8 145.3 142.3 155.8 170.3 259.1 300.5 295.7
Domestic 1,217.3 1,390.5 1,467.9 1,551.5 1,633.2 1,680.3 1,375.2 1,242.0 1,177.1 1,064.7 887.0 584.3 621.3 680.9 685.3
[Breakdown*3]
1,276.6
1,529.7
1,766.0 1,792.5 1,864.11,944.4
1,705.51,539.9
1,655.81,539.2
1,271.7
967.01,089.8
1,341.01,304.8
1.44%1.66%
2.08%2.24% 2.20% 2.12%
1.67%1.40% 1.45% 1.41%
1.17%0.90% 0.99%
1.25% 1.25%
0
5,000
10,000
15,000
20,000
25,000
EndMar 08
EndMar 09
EndMar 10
EndMar 11
EndMar 12
EndMar 13
EndMar 14
EndMar 15
EndMar 16
EndMar 17
EndMar 18
EndMar 19
EndMar 20
EndMar 21
EndSep 21
Risk-monitored loan ratio*2
58
20年度実績
23年度計画
デジタルトランスフォーメーション
Approach ofproposing solutionsto customer’s issues
Asia business*4
Expense(overseas)
GlobalAM / IS
GCIB &GlobalMarkets
Expense(domestic)
Wealthmanagement
¥1.23tn
Plan of net operating profits
Strategy for growth:approx. ¥150bn
¥1.4tn
Structural reforms:approx. ¥100bn
Newbusiness
Digital transformation
Impact of marketconditions, etc.*3
FY20result
FY23plan
*1 Re-shown from page 42, Fiscal 2020 Results Presentation*2 Managerial accounting basis. Local currency basis*3 Includes impact of CVA related profits/losses, impact of policy rate cut in Asia etc.*4 FY23 plan versus FY21 plan. Estimated decrease in net operating profits during FY21 is included in impact of market conditions, etc.
*1*2
59
17年度実績
20年度実績
20年度(調整後)
23年度計画
¥2.74tn¥2.62tn
Plan of expenses
-Strictly allocate expenses in a way consistent with progress in each business.Reduce base expenses in order to allocate funds to the area of growth
(¥bn)
Expense ratio68.7%
Expense ratiomid-60%
*1 Re-shown from page 48, Fiscal 2020 Results Presentation*2 Internal managerial figure
System30 Domestic
(50)Overseas
(30)
Expenses for business growth50
Base expenses(50)
Performance-linked expenses10
Global AM/ISWM etc.,
Asia business
Expense forecast (the Bank including MUAH, KS, BDI)*2
FY20 Personnel Facility Overseas KS / BDI FY23
FY20 MUFG total expense
Approx. 65%BK
TB
SCHD
NICOS・ACOM
(¥bn)
Domestic
(45)(70)
FY17result
FY20result
FY20(adjusted)
FY23plan
Plan of expenses*1
60
-Reduce low profitable transactions and replace them with profitable transactions
116.7117.8
105
110
115
End Mar20
End Mar21
DS R&C JCIB GCIB GCB AM/IS GlobalMarkets
Others End Mar24
(¥tn)
0
MaintainFY20 level
Reducelow profitable transactions
Replace with profitable transactions
Plan of RWA *1*2
*1 Re-shown from page 50, Fiscal 2020 Results Presentation*2 Estimated RWA on the finalized Basel III reforms basis. Includes net unrealized gains on AFS securities
61
Plan by business group
Business Group
Net operating profits (¥bn)*2 Expense ratio*2 ROE*3 RWA (¥tn)*4
FY23plan vs FY20 FY23
plan vs FY20 FY23plan vs FY20 FY23
plan vs FY20
Digital Service 205.0 30.0 73% (4ppt) 4.5% 2ppt 9.2
Retail & CommercialBanking 140.0 75.0 77% (11ppt) 5% 3.5ppt 16.6
Japanese Corporate& Investment Banking 285.0 45.0 51% (5ppt) 9% 4ppt 30.0
Global Corporate& Investment Banking 180.0 40.0 58% (8ppt) 7% 4ppt 21.8
Global CommercialBanking 290.0 20.0 64% (1ppt) 6% 5.5ppt 19.5
Asset Management& Investor Services 100.0 25.0 69% (3ppt) 28% (0.5ppt) 3.4
Global Markets 370.0 (25.0) 39% 2ppt 8% 2ppt 20.7
DS
JCIB
GCB
AM/IS
GCIB
GlobalMarkets
R&C
*1 Re-shown from page 54, Fiscal 2020 Results Presentation *2 Local currency basis*3 Calculated based on Risk Assets (R&C, JCIB, GCIB and GCB) or economic capital (AM/IS and Global Markets)
(Managerial accounting basis. Net profit basis. Calculated excluding non-JPY mid- to long-term funding costs)*4 The finalized Basel III reforms basis. Managerial accounting basis. (Estimation as of March)*5 +3% excluding the impact of profits on sales of AMP Capital shares
Consolidated
*1
*5
62
2010∎ Established MUMSS and MSMS in
Japan.
2011∎ Appointed the second
representative to MS board of directors. Shares were converted into common stock. MS became MUFG’s equity method affiliate
0%
6%
12%
18%
0
100
200
300
FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20
Equity in earnings of equity method investees (left axis)ROI (right axis) = equity in earnings / consolidated book value
- Alliance with MS focuses on collaboration in IB*2, then expanding to WM & AM/IS- Aim to explore new collaborations by further strengthening the alliance
Investment and alliance with Morgan Stanley
(¥bn)
History of investment and alliance with MS Equity in earnings and ROI
Consolidated book value*4*5: ¥1,940.8bn2008∎ Invested US$9 billion in preferred
stock in MS to fundamentally strengthen global IB operations
2009∎ Established a LMJV*3 to provide
corporate financing services in the Americas
Major background Results
∎ Out of overseas IB operations, M&A advisory and ECM make the best use of MS functions, emphasizing on improving management efficiency
At present∎ Expanding collaboration in WM
and AM/IS
Continuous efforts on developing allianceActive dialogues between top management∎ The Global Steering Committee (GSC) is held twice
a year. Senior management, including CEOs of both companies, continue to discuss the further development of the strategic alliance.
∎ In recent years, collaboration and knowledge sharing progressed in WM, as discussions held at GSC being the starting point.
∎ Two directors (Nobuyuki Hirano and Hironori Kamezawa) *6
Secondment program (from 2010)∎ Accumulated total number of employees dispatched
from MUFG to MS is over 70*7. Internalizing MS's advanced practices and knowledge in various fields.
Further Strengthening the Alliance~ Developing New Stages of Collaboration
*1 Re-shown from page 79, Fiscal 2020 Results Presentation *2 Investment Banking *3 LMJV:Loan Marketing Joint Venture *4 The exception to the double-gearing regulation was lifted in stages from the end of March 2019 to the end of March 2023. Capital deductions increased. The impact on the CET1 ratio (on a regulatory finalization basis) is approx. (0.5)% as of end of March 2021 *5 Includes preferred stock *6 Elected at the MS General Meeting on May 20, 2021
*7 As of end of March 2021
∎ In the DCM area, where affinity with lending is high, large-scale contracts are regularly closed through collaboration that takes advantage of the strengths of both companies
∎ Maintaining top-class IB league tables in Japan, centered on M&A and DCM
∎ Recognize MS's profit and loss by the amount of the equity ratio as equity in earnings of equity method investees
∎ Accelerate WM growth by learning know-hows from MS
∎ In AM/IS, sales of MS investment products that have strengths progressed in Japan
*1
63
Sale of MUB (Transaction overview / Structure)
*1 Estimated tangible book value of US$ 6.25 bn to be delivered at the closing *2 US$ 593 mm. Internal managerial figure (FY2020) *3 Finalized Basel III reforms basis. Excludes net unrealized gains on AFS securities *4 Post-tax estimate *5 Calculated based on the CET1 capital etc. as of end June 2021
*6 Plan to discuss forming business alliances with USB after the Share Purchase Agreement is signed *7 Post-transaction ownership ratio (based on the number of USB shares outstanding as of September 16, 2021) *8 Asset Management *9 Investor Services
*10 GCIB business, Global Markets business to the extent related to the GCIB business (transactions with clients and investors) and certain middle and back office functions to be transferred to the Bank’s U.S. branches or its affiliates(prior to the closing)
Transaction overview
Structure
Outline(US$bn)
Consider-ation paid
Impact on CET1 ratio*3
Decrease in RWA:Approx. +50bps
Gain on sale*4: Approx. +10bps
Temporary expenses: TBD
Investment in USB: Approx. (15bps)*5
• Price / TBV *1: Approx. 1.3x• Price / Earnings*2: Approx. 13.5
Cash5.5
USBstock
2.5 worth
Dividend or share repurchase
Approx. 9.6
Total transaction value Approx. 17.6
Consideration paid by Approx. 8.0
MUFGSecuritiesAmericas
Non-Banksubsidiaries
(Leasing、AM*8、IS*9)
100%the Securities
HD the Bankthe Trust Bank
MUFGU.S. Bancorp
(USB)
U.S. Bank
Morgan Stanley
the Trust Bank(NY)
Scope of the transaction
the Bank(NY / LA / Chicago)
BranchesSubsidiaries operating in the U.S.MUAH
100% 100%4.9%Approx. 21%
95.1%
Consider forming a business alliance*6
3
2.9%*7
Ownership2
MUB
Share transfer to USB2
GCIB / GM
GCIB / GM 1
GCIB business, Global Markets (GM) business, etc. to be transferred prior to the closing*10
64
Financial results*1 of MUAH, KS, and BDI(¥bn) (US$mm)
FY20H1 FY21H1 YoY FY20H1 FY21H1 YoY
Total revenue 321.2 321.6 0.3 2,982 2,909 (73)Non-interest expenses 256.3 274.7 18.4 2,379 2,485 106Pre-tax, pre-provision (loss) income 64.9 46.8 (18.0) 603 424 (179)Provision for credit losses 89.5 (38.5) (128.1) 831 (349) (1,180)Net (loss) income attributable to MUAH (30.5) 76.3 106.8 (284) 690 974
(¥bn) (THB mm)
FY20H1 FY21H1 YoY FY20H1 FY21H1 YoY
Total income 204.6 228.2 23.6 58,629 66,343 7,714Operating expenses 84.6 84.7 0.0 24,266 24,637 371Pre-provision operating profit 119.9 143.4 23.5 34,363 41,706 7,343Expected credit loss 60.5 52.7 (7.7) 17,355 15,342 (2,013)Net profit attributable to owners of the bank 47.2 72.4 25.1 13,540 21,048 7,508
(¥bn) (IDR bn)
FY20H1 FY21H1 YoY FY20H1 FY21H1 YoY
Total operating income 67.5 62.8 (4.6) 8,889 8,166 (723)Operating expenses 32.5 32.3 (0.1) 4,278 4,201 (77)Pre-provision operating profit 35.0 30.5 (4.5) 4,611 3,965 (646)Cost of credit 24.4 19.4 (4.9) 3,211 2,529 (682)Net profit after tax 6.4 7.6 1.2 845 998 153
MUAH*2
KS*3
BDI*4
*1 All figures are converted into ¥ with actual exchange rates as of end of each period. For FY20H1 is US$1=¥107.74, THB1=¥3.49, IDR1=¥0.0076. For FY21H1 is US$1=¥110.58, THB1=¥3.44, IDR1=¥0.0077 *2 Financial results as disclosed in MUAH’s 10-Q reports based on U.S. GAAP
*3 Financial results as disclosed in KS’s financial report based on Thai GAAP*4 Financial results as disclosed in BDI’s financial report based on Indonesian GAAP. Incorporated impact from netting-off loss on restructuring to interest income
65
1.99% 2.01% 1.91%
NIM
3,093 3,077
1,561 1,466
0
2,000
4,000
FY19 FY20 FY21
NII (Full-year results)NII (Interim results)
Key figures*1 of MUAH
95.9 102.4 104.0
0
50
100
End Dec 19 End Dec 20 End Jun 21
107.2%
83.9% 85.4%
50%
100%
FY19 FY20 FY21H1
26.3 31.2 31.6
16.9 16.2 15.92.5 2.7 2.6
38.0 29.0 25.7
4.5 3.0 2.8
0
50
100
End Dec 19 End Dec 20 End Jun 21
Other consumerResidential mortgage & home equityOther commercialCommercial mortgageCommercial & industrial
78.6
(US$bn)
88.2 82.22,705
2,905
1,421 1,443
0
1,500
3,000
FY19 FY20 FY21
Full-year results Interim results
(4.4%)
1.0 %
8.0 %
14.1 % 15.3 % 15.9 %
(10%)
0%
10%
20%
FY19 FY20 FY21H1
ROE CET1 ratio
Lending balance*2 Net interest income Non-interest income
Deposit balance Cost to income ratio*3 *4 ROE / CET1 ratio*5
*1 Financial results as disclosed in MUAH's 10-K and 10-Q reports based on U.S. GAAP *2 Loans held for investment based on year-end balances *3 Efficiency ratio*4 The adjusted efficiency ratio is a non-GAAP financial measure. Management believes adjusting the efficiency ratio for the fees and costs associated with services provided to MUFG Bank,
Ltd. branches in the U.S. enhances the comparability of MUAH’s efficiency ratio when compared with other financial institutions. Adjusted Efficiency Ratio for FY21H1 was 82.40%. In addition, management believes adjusting noninterest expense for the impact of goodwill impairment and revenue for the impact of the Tax Cuts and Jobs Actenhances comparability between periods. Adjusted Efficiency Ratio for FY19 and FY20 were 74.69% and 73.12%, respectively
*5 U.S. Basel III standardized approach; fully phased-in
(US$bn) (US$mm) (US$mm)
66
3.60%3.47%
3.08%
NIM
76.4 81.3
42.8 38.6
0
50
100
FY19 FY20 FY21
NII (Full-year results)NII (Interim results)
Key figures of KS
12.8%
8.3%
14.2%
11.9%
12.9%
12.8%
0%
10%
20%
FY19 FY20 FY21H1
ROE CET1 ratio
*3*2
42.9% 42.5%
37.1%
30%
40%
50%
60%
FY19 FY20 FY21H1
45.2
32.7
15.9
27.8
0
20
40
FY19 FY20 FY21
Full-year results Interim results
1,567 1,835 1,891
0
1,000
2,000
End Dec 19 End Dec 20 End Jun 21
661 651 644
273 279 289 414 424 418 270 284 284 199 195 187
0
1,000
2,000
End Dec 19 End Dec 20 End Jun 21
Credit card and personal loansMortgageAutoSMECorporate
1,818 1,833 1,821 *1
*3
Lending balance Net interest income Non-interest income
Deposit balance Cost to income ratio ROE / CET1 ratio*4
(THB bn) (THB bn) (THB bn)
(THB bn)
*1 Excluding one-time gains on investments from the sales of 50% of shares in Ngern Tid Lor Public Company Limited (TIDLOR) (TIDLOR transaction), normalized non-interest income for FY19 recorded at THB 36.6bn. Ngern Tid Lor Company Limited changed the status to Ngern Tid Lor Public Company Limited (TIDLOR) on 17 December, 2020
*2 Excluding the extraordinary gains from the sales of 20% of shares in TIDLOR, normalized non-interest income, normalized cost to income ratio and normalized ROE of FY21H1 were THB 17.1bn, 43.4% and 8.8%, respectively
*3 Excluding one-time gains on investments from TIDLOR transaction and provision in accordance to the amended Labor Protection Act, normalized cost to income and normalized ROE were recorded at 45.1% and 10.5%, respectively *4 Non-consolidated
*2
*1
*2
67
8.4%7.5% 7.5%
NIM
14.4 13.6
6.9 6.8
0
10
20
FY19 FY20 FY21
NII (Full-year results)NII (Interim results)
Key figures of BDI
112 126 121
0
50
100
150
End Dec 19 End Dec 20 End Jun 21
3.7 3.3
2.0
1.4
0
2
4
FY19 FY20 FY21
Full-year results Interim results
44.0 54.8 56.6
28.7 24.4 22.0
12.3 11.3 10.7
54.8 44.0 41.3
4.5 1.3 0.9
0
50
100
150
End Dec 19 End Dec 20 End Jun 21
Micro/others AutoConsumer SMEEnterprise and FI144.3 135.8 131.4
51.4%48.5%
51.4%
30%
40%
50%
60%
FY19 FY20 FY21H1
11.1%
2.7 %5.2 %
23.4% 24.2 % 25.2 %
0%
10%
20%
30%
FY19 FY20 FY21H1
ROE CET1 ratio
Lending balance Net interest income*1 Non-interest income
Deposit balance Cost to income ratio ROE*3 / CET1 ratio
(IDR tn) (IDR tn) (IDR tn)
(IDR tn)
*1 Netted-off with loss on restructuring*2 Calculation method is modified. In accordance to the modification, NIM in FY19 and FY20 are restated*3 Following new OJK regulation dated 20 July 2020, ROE is calculated per Tier 1 capital
*2
68
Credit portfolio of energy
Credit exposure*1 NPLs*4
Americas
1.1
1.82.5
0.1 Integrated*5
Upstream*6
Mid/downstream*7
Relatedindustry*8
(¥bn) EndSep 21
NPLs*4 67.8
Secured amount 54.0
Allowance 8.8
NPLs*4 (net) 4.9
End Sep 21End Sep 21(¥tn) (¥tn)
Breakdown by sub-sector*1 Breakdown by region*1
*1 Including undrawn commitment and excluding market exposure. From end Sep 21, including only energy sector based on Global Industry Classification Standard (GICS) and excluding mining sector *2 Collateralized or guaranteed *3 The Bank consolidated(excl. KS, BDI) and the Trust Bank. Including undrawn commitment and excluding market exposure *4 NPLs are based on the relevant rules for risk-monitored loans under Japanese Banking Act, except for NPLs in overseas subsidiaries which are based on each subsidiary’s internal criteria *5 Integrated business from upstream to downstream
*6 Exploration, development and production of oil and gas *7 Storage, transportation, refinement, retail *8 Sales of equipment and service to companies among upstream industry *9 Project finance and trade finance *10 Reserve based lending
Note: All figures are on managerial accounting basis, aggregating internal management figures of each subsidiary
(¥tn) EndSep 21
Credit exposure 5.5
Unsecured amount 3.4
Secured*2 amount 2.1
% of total exposure*3 Approx. 5%
1.2
1.0
0.8
1.3
1.2
EMEA
Structured finance*9
Of which of RBL*10
0.1
Asia &Oceania
Japan
69
Credit portfolio of air transportation (incl. aircraft finance)
0.3
0.5
0.5
0.8
Americas
Asia &Oceania
EMEA
Japan
0.81.3
StructuredFinance
Corporate
0.91.1
1.4 1.6 1.5
0.40.4 0.6
0
1
2
End Mar 20 End Mar 21 End Sep 21
2.01.82.1
0.3
0.5
0.6
0.6
(¥bn) EndMar 21
EndSep 21 Changes
NPLs*3 95.4 79.7 (15.7)
Secured amount 56.4 47.9 (8.5)
Allowance 23.2 20.6 (2.6)
NPLs*3 (net) 15.6 11.2 (4.4)
End Mar 21
(¥tn)
(¥tn) (¥tn)
End Mar 21
End Sep 21 End Sep 21
Credit exposure*1
Breakdown by structure*1 Breakdown by region*1
Unsecured
Secured*2
*1 Including undrawn commitment and excluding market exposure*2 Collateralized or guaranteed *3 NPLs are based on the relevant rules for risk-monitored loans under Japanese Banking Act, except for NPLs in
overseas subsidiaries which are based on each subsidiary’s internal criteriaNote: All figures are on managerial accounting basis, aggregating internal management figures of each subsidiary
NPLs*3
70
Promote and realize MUFG’s purpose through the sponsorship and co-creation of business
Sponsorship and co-creation of business
Sponsorship Business co-creation
Principal partner Promote and realize the purpose through
rugby
Co-creation partner
Create new business and social values inspired by rugby
-Become a principal partner of the new rugby league opening on January 7, 2022
Overview of the partnership
• Empathize with the spirit of rugby "One for All, All for One" and the perseverance of players moving forward with the power of teamwork
• Sponsor JAPAN RUGBY LEAGUE ONE based on the affinity with MUFG’s purpose of “Committed to empowering a brighter future.”
• Work with the League to create new business and social values (the co-creation of business)
🄫🄫JRLO
71
Transformation of corporate culture – Career Challenge
-A growing number of employees used or applied for systems designed to help them gainexperience in a variety of business fields and achieve autonomous career developmentCareer Challenge System
Program Details FY20results
FY21H1 results
FY23targets
Job Challenge
An in-house posting system targeting Group employees. Covering the extensive scope of business fields the MUFG Group encompasses, this system offers opportunities for applicants to take on tasks that align with their desires regardless of which Group entity they belong to.
773 applicants*1
845applicants*1
1,275 applicants*1
Open recruitment system for
branch manager
An open recruitment system for general managers in domestic branches. 38 applicants 75 applicants -
New BusinessProposal
This program solicits proposals from employees with regard to new services, products and operational improvements, thereby providing employees whose proposals are selected with opportunities to launch and spearhead proposed initiatives.
386 applicants*1
123 applicants*1
400 applicants*1
Open EX
This in-house posting program was developed to provide employees with opportunities to be seconded to startups or other external corporations as MUFG’s human resources evaluation criteria attach greater importance to possessing a broad range of business experience and knowledge about diverse corporate cultures.
17 employees*2
(cumulativetotal)
28 employees*2
(cumulativetotal)
100 employees*2
Challenge Leave
This system supports employees’ pursuit of their dreams or personal growth, which may include becoming an entrepreneur, studying abroad, acquiring certification or getting elected to a public office, by granting leave for a certain period of time.
15employees*3
(cumulativetotal)
20employees*3
(cumulativetotal)
-
*1 The Bank, the Trust Bank and MUMSS *2 The Bank *3 The Bank and the Trust Bank
72
Social(Response to aging population & low birthrate)
Services depending on diverse lifestyles Consultation regarding preparations for prolonged life
expectancy and optimal asset building & management
Help them nurture capabilities to achieve independence and navigate their future as they pursue personal goals
• Cumulative no. of seminars held since 2012: 3,285
Upbringing of future generation leaders
Help resolve the anxiety accompanying the prospect of a possible deterioration of cognitive functions in a rapidly aging society• A dedicated finance management app
assists both customers and their families• More than 5,000 users since March 2019
Enable customers to plan for future inheritance needs using digital technologies• An app designed to assist elderly
customers in communication with families• Help with the preparation of living wills
Smooth succession of businesses and assets
Support children and students affected by the fallout from the COVID-19 pandemic Support students who are being forced to give up
higher education due to economic hardship or other reasons as well as children who have lost parents to disease or accident, etc.
Take a groupwide, integrated approach to deliver solutions
Meet wide-ranging needs by employing alliance partners’ networks
A digital-driven service aimed at connecting customers and their offspring
Deliver a diverse range of products such as term deposits, non-JPY deposits, bonds, investment trusts and life insurance as well as products that offer tax benefits
The Bank, the Trust Bank and MUMSS provide an appointment-based proxy service free of charge
-Support the coming age of centenarians through our comprehensive financial service
• Individual customers’ identified asset: ¥100tn• AUM*1 entrusted by individual customers: ¥25.6tn
Webinars on succession of businesses and assets, etc.
Take full advantage of MUFG’s wealth management digital platform and enhance our proposal capabilities backed by the Group’s comprehensive strengths
• No. of webinars held in FY21H1: approx. 380
Financial and Economic Education
*1 Asset under management
73
Social(Inclusion & diversity)-Develop a culture that empowers human resources with diverse personalities, competencies and experiences for MUFG’s sustainable growth
Results(As of end Mar 21) Targets
Gender
Ratio of women in management in Japan*1 16.7% 18.0%
by end Mar 2024
Number of female directors and executive officers*2
20(As of Apr 2021) -
Ratio of female directors(MUFG)
25%(As of Jun 2021)
Agreeing with the “Challenge initiatives for 30% of Executives to be
Women by 2030”*3
Ratio of male employees taking childcare leave*4(The Bank, the Trust Bank, MUMSS)
90%, 85%,100% 100%
Foreign nationals
Ratio of employees 52% -
Number of executive officers (The Bank)
13(incl. 3 women) -
Ratio of foreign nationals in middle managerial positions*5 29% Maintaining or improving
the current level
Mid-career hires
Ratio of mid-career hires in managerial positions*6 9.9% Maintaining or improving
the current level
People with disabilities
Number of people with disabilities Approx. 1,400 -
*1 Employees in posts above manager *2 Total of MUFG, the Bank, the Trust Bank, MUMSS, and NICOS *3 The initiative led by the Nippon Keidanren*4 Percentage of the use of the leave by male employees of each subsidiary whose eligibility for childcare leaves expired in FY20 *5 Ratio of individuals hired overseas (The Bank and MUMSS cover overseas branches and affiliates which are substantially treated as a branch, such as MUB. The Trust Bank only covers overseas branches.) to the number of those in managerial positions at home and abroad *6 Ratio of mid-career hires to individuals in managerial positions in Japan (including senior managers and others tasked with supervision)
Raising awareness regarding diverse sense of value and background
Trainings and workshops Unconscious bias Developing women’s career LGBTQ Childcare, caregiving, infertility
treatment
Newly disclosed
Newly disclosed
Recognized due to our initiatives to facilitate women’s career development
Received Gold rating due to such measures as the introduction of a same-sex partnership certification program
External recognition
MUFG’s diversity
A LGBTQ-related message video created together with other companies was selected as a Best Practice outstanding initiative
74
Governance(Revising CG*1 policy and enhancing disclosure)
-Incorporated our commitment to pursuing sustainability into the “MUFG CG Policies” and specified sustainability-related expertise in the directors’ skill matrixResponding to the CG Code revision
∎ Proactive approach to the development of our CG structure
In “2-1. Basic approach,” add “MUFG will actively contribute to the realization of a sustainable society” under the “MUFG Way”
In “9-4. Appropriate collaboration, etc. with all stakeholders,” add “Based on the belief that sustainable environment and society are the main prerequisites for the Group‘s sustainable growth, MUFG will work to create value by solving environmental and social issues and taking the Group's management strategy together“
Name
Mariko Fujii ●
Keiko Honda ● ●
Kaoru Kato ● ●
Satoko Kuwabara ● ●
Toby S. Myerson ●
Hirofumi Nomoto ● ●
Yasushi Shingai ● ● ●
Koichi Tsuji ●
Tarisa Watanagase ●
Ritsuo Ogura
Kenichi Miyanaga ●
Kanetsugu Mike ● ● ●
Saburo Araki ●
Iwao Nagashima ● ●
Junichi Hanzawa ●
Hironori Kamezawa ● ● ●
Global IT/Digital Sustaina-bility
A wealth of knowledge and
experience in the fields of corporate
management, finance, financial accounting and
law
Extensive knowledge of
MUFG’s business and the ability to
appropriately perform
management of MUFG
Transitioned to a company with three committees in 2015 BOD*2 has had a diverse structure with a majority of outside
directors since 2018 Develop CG structure focusing on the effectiveness of BOD
∎ Checked our structure in light of the CG Code revision in 2021
CG Policies R
evisionCG
Report
disclosure
• Enhanced disclosure on the skill matrix based on our recognition of social and management issues
• Human resource diversity is essential to “new challenges and transformation”
• Enhanced disclosure on “inclusion & diversity” and “employee engagement” initiatives
Skill matrix of the Board members(Knowledge, expertise and experience)
Outside
Internal
Identified matters that need to be updated via discussion by BOD
Skill matrix Diversity Sustainability
Already disclosed Newly disclosed
*1 Corporate Governance *2 The Board of Directors
75
Governance(Structure of the Board of Directors)
Name Committee-related duties
Indepen-dent
Outside
Knowledge, expertise and experienceCorporate manage-
mentFinance Finance &
accountingLegal affairs Global IT/digital Sustaina-
bility
1 Mariko FujiiNominatingCompensationRisk*
● – ● – – ● – –
2 Keiko Honda Audit ● – ● – – ● – ●
3 Kaoru KatoNominatingCompensationAudit
● ● – – – – ● ●
4 Satoko Kuwabara NominatingCompensation* ● – – – ● ● – ●
5 Toby S. Myerson Risk ● – – – ● ● – –
6 Hirofumi Nomoto Nominating*Compensation ● ● – – – – ● ●
7 Yasushi Shingai AuditRisk ● ● – ● – ● ● ●
8 Koichi Tsuji Audit* ● – – ● – ● – –
9 Tarisa Watanagase Risk ● – ● – – ● – –
10 Ritsuo Ogura Audit
Extensive knowledge of MUFG’s business and the ability to appropriately perform management of MUFG
– – –
11 Kenichi Miyanaga Audit ● – –
12 Kanetsugu Mike ● ● ●
13 Saburo Araki – – – ●
14 Iwao Nagashima ● – ●
15 Junichi Hanzawa – – ●
16 Hironori Kamezawa NominatingCompensation ● ● ●
Independent outside directors
Female directors
Foreign nationals
9/1656.2%
4/1625.0%
2/1612.5%
Nominating: Nominating and Governance Committee member Compensation: Compensation Committee memberAudit: Audit Committee member Risk: Risk Committee member *Chairperson
(As of end June 2021)
76
Governance (Compensation system)
Type of compen-
sationLinkage with performance
Performance-based
compensation range
Standards for payment Weight Time of payment
Payment method
Proportion of Group CEO’s
compensation
Annual base
salaryFixed -
・Paid based on positions, etc.・Includes Director Allowance, Committee and Chair Allowance, Housing Allowance, Overseas Representative Allowance, etc.
- Monthly Cash 1
Stock compen-
sation
Non performance
- based- ・Base amount by position -
At the time of retirement of executives
50% in shares50% in cash
*4
1Medium- to long-term
performance-based
0% - 150%Base amount byposition ×
Target attainment rate of indices below in MTBP(1) Consolidated ROE(2) Consolidated expenses reduction amount
(excluding those linked to revenues)(3) Ratings granted by ESG rating agencies*1
<50%>30%15%
5% At the end of the MTBP
Comparison of year-on-year growth rate of indices below with competitors*2
(1)Consolidated net operating profits(2)Profits attributable to owners of parent
<50%>
25%25%
Cashbonuses
Short-term performance
-based0% - 150%
Baseamount byposition ×
Performance factor(quantitative evaluation factor applied to the Group CEO)Rate of year-on-year change and target attainment rate of indices below(1) Consolidated net operating profits(2) Profits attributable to owners of parent(3) Consolidated ROE(4) Consolidated expense amount
<60%>
20%10%20%10%
Annually Cash 1Status of individual execution of duties(qualitative evaluation factor applied to Group CEO)・Improvement in customer-segment profitability・Risks handling・Advances in ESG-related initiatives to promote sustainability management*3
・TSR, etc.
<40%>
*1 An absolute evaluation basis in light of the degree of improvement in external ratings granted by major five ESG rating agencies (CDP, FTSE, MSCI, S&P Dow Jones and Sustainalytics) *2 Evaluated based on comparisons with main competitors (Mizuho Financial Group and Sumitomo Mitsui Financial Group)*3 Includes contribution to the resolution of environmental and social concerns, improvement in employee engagement and the strengthening and upgrading of MUFG’s governance structure *4 Subject to malus (confiscation) and clawback (restitution claim)
77
Promote initiatives to counter climate change - TCFDGovernance Built a system for the Board of Directors to oversee climate change initiatives
Deliberate regularly at “Sustainability Committee” chaired by Chief Sustainability Officer Reflected ESG elements in its executive compensation Established external advisors in the environmental and social fields
Strategy Actively support financing for transition and strengthen engagement with customers・ Featured our customer engagement initiatives in the “MUFG Sustainability Report 2021” *1
Launched Renewable Energy Fund:¥100bn, work on carbon offsets (afforestation, etc.) Consider reflection of climate change risk into credit process Organized descriptions of risk cases associated with transition risks and physical risks vis-à-vis MUFG’s main risk
categories and set out a time frame for said risks Enhancement of scenario analysis (2021 to 2050) :Included the automobile sector into the scope of transition risk
assessments; the 1.5°C scenario*2 was additionally used in assessments• Transition risks (energy, utility and automobile sectors): approx. ¥1.5 bn to ¥23 bn/year,
physical risks (flooding): cumulative total approx. ¥38bn
Riskmanagement
Recognize as one of the Top Risks and included in the Risk Appetite Framework Consider environment and society by managing “MUFG Environmental and Social Policy Framework” and “the Equator
Principles• Revised coal-fire power generation, forestry, palm oil sectors in Apr. 2021
Changed the basis for assessments from lending balance to credit balance; enhanced the content of disclosure regarding the breakdown of carbon-related assets in energy and utility sectors
Metrics and targets
Set target of GHG emissions in its finance portfolio: net zero by 2050 Set target of GHG emissions in its own operations: net zero by 2030
• Shifted domestic electricity procurement to 100% renewable sources (The Bank, the Trust Bank, the Securities HD)
Raised sustainable finance goal: ¥20tn (incl. ¥8tn for environment) to ¥35tn (incl. ¥18tn for same) Set CO2 reduction target in renewable energy project financing*3: 70mil t-CO2 (cumulative total from FY19 to FY30) Set reduction target for balance of project financing to coal fired power generation project: 50% from FY19 by FY30 and
zero targeting by FY40
■・・・Major initiatives after the investor presentation in May 2021
*1 English version will be disclosed around end Nov. 2021 *2 Scenario released by NGFS (Network for Greening the Financial System)*3 Cumulative annual CO2 reduction effect from renewable energy projects MUFG has provided finance in the fiscal year, calculated based on the amount of
electricity generated, facility utilization rate, and emission factors. The figure is after taking into account the share of MUFG’s loan arrangement or underwriting amount
78
39.9447.54*3
58.9968.29 73.22 68.51 68.28
74.5566.91
40.95
60.50 60.87
0
20
40
60
80
FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21H1
6.89%7.75%*2
8.77% 9.05% 8.74%7.63% 7.25% 7.53%
6.45%
3.85%5.63%
10.91%
6.6% 7.4%*2 8.0% 8.1% 7.4%6.2% 6.0% 6.3%
5.4%
3.3%4.7%
9.0%
0%
5%
10%
FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21H1
MUFG basis JPX basis
ROE / EPS
ROE
EPS
(¥)
*1
Consolidated
Consolidated
*1
*2 11.10%(MUFG basis), 10.6%(JPX basis) before excluding negative goodwill associated with application of equity method accounting on our investment in Morgan Stanley*3 ¥68.09 before excluding negative goodwill associated with application of equity method accounting on our investment in Morgan Stanley
{(Total shareholders' equity at the beginning of the period + Foreign currency translation adjustments at the beginning of the period)+ (Total shareholders' equity at the end of the period + Foreign currency translation adjustments at the end of the period)} / 2
Interim profits attributable to owners of parent x 2×100
79
TLAC requirement – The best capital mix and external TLAC ratio
As of end Sep 21
Minimum requirement
From end Mar 19
From endMar 22
Risk weighted asset basis 20.03% 16.0% 18.0%
Total exposure basis 9.22% 6.0% 6.75%
9.2%
1.6%2.1%2.5%
4.3%
Regulatory Capital Buffers*4
4.0%
CET1: 4.5%
AT1Tier2
Contribution of DIFR*3: 2.5%
Other TLAC Eligible Debt*2
4.0%
*1 Risk weighted asset*2 Including adjustment of difference between calculation method of total capital ratio and external TLAC ratio and adjustment of amount of other TLAC-
eligible liabilities owned by the issuer’s group, etc. *3 Contribution of Deposit Insurance Fund Reserves : Japanese Deposit Insurance Fund Reserves fulfill the requirements for ex-ante commitments to
recapitalize a G-SIB in resolution set out in the FSB’s TLAC termsheet(Can include 2.5% and 3.5% of RWAs from end Mar 2019 to Mar 2022 and after end Mar 2022, respectively, in external TLAC ratio)
*4 CET1 Buffer applicable to MUFG: G-SIB Surcharge:1.5%, Capital Conservation Buffer:2.5%, and Counter-cyclical Buffer:0.01%
MUFG is the primary funding entity, which is designated as the resolution entity
in Japan by FSA
As of end Sep 2021 Minimum requirement
Totalcapital ratio
12%
Total capital ratio17.14%
External TLAC ratio20.03%
ExternalTLAC ratio16%
MUFG’s external TLAC ratio and minimumrequirement
MUFG’s RWA*1 based external TLAC ratio
• Aiming for optimal balance between capital efficiency and capital adequacy in qualitative and quantitative aspects− Secure necessary and sufficient level of capital with utilization of AT1 / Tier2− Maintain sustainable external TLAC ratio for the long term by raising external TLAC eligible senior debt
80
TLAC requirement – Issuance track record & redemption scheduleTLAC-eligible senior debt*1
(US$bn)
7.5
13.210.3
4.5 6.0 7.5 7.3 6.53.0
1.5
1.0
1.2
0.60.6
0.6 1.0 2.0
0.6
0.4
0.45.0
8.6 9.0
14.2 11.9
5.1 6.6 7.0 8.1 8.3 8.8
4.1 4.1 2.3 2.6 3.6
1.3
0
5
10
15
20
FY15 FY16 FY17 FY18 FY19 FY20 FY21H1
FY21 FY22 FY23 FY24 FY25 FY26 FY27 FY28 FY29 FY30
USD EUR AUD
Redemption schedule*3Issuance track record*2
450 400 320155
27360
250 170 60 157 173300
150 245 116 37
345 405320
135
250
212
499496
95
247 236
311
114 4096 167
795 805
640
290
523
272150
749666
155
404 409
611
264 285212 204
0
200
400
600
800
1,000
FY15 FY16 FY17 FY18 FY19 FY20 FY21H1
FY21 FY22 FY23 FY24 FY25 FY26 FY27 FY28 FY29 FY30
AT1 Tier2
AT1, Tier2 bond(¥bn)
Redemption schedule*3Issuance track record*2
(1.0) (1.6)
The amount of buyback
*1 All figures are converted into US$ using actual exchange rates as of end Sep 2021*2 Total of public issuance (excluding the amount of buyback), as of end Sep 2021 *3 Annual figures assuming that all callable notes are to be redeemed on their respective first callable dates. Tier2 contains Basel II Tier2
sub notes issued by the Bank and the Trust Bank (including their respective overseas special purpose companies)